China’s Tencent Holdings plans to shut down its non-fungible token (NFT) platform Huanhe only a year after its launch. This decision was made by social media firm Tencent Holdings due to Beijing’s strict ban on NFT resale.
Huanhe to close after a year of launch, China Curbs NFT Reselling
Shenzhen-headquartered technology conglomerate Tencent is preparing to shut down its NFT platform as early as this week, according to a report by Chinese media outlet Jiemian, quoted by the South China Morning Post. The move comes amid restrictions on the secondary trading of NFTs in the People’s Republic which are said to have hurt the platform’s business potential.
Jiemian has cited unidentified Tencent sources, but Tencent declined to comment. Huanhe is a digital collectibles company that issues and distributes crypto-based digital collectibles. It was founded just one year ago.
All NFTs on the app are already marked as “sold out,” although users can still visit augmented reality art exhibitions. According to another report, another Tencent source cited by the state-owned media Yicai Global reveals that trades were stopped early in July as a result of a government crackdown.
Huanhe was developed by Tencent’s Platform and Content Group (PCG), which was hit hard by lay-offs earlier this year. SCMP points out that the NFT unit’s closure would signal Tencent’s withdrawal from the digital collectibles marketplace.
In June, Tencent’s social media app Wechat announced its intentions to prohibit public accounts facilitating secondary trading or offering guidance for non-fungible tokens. The Tencent News app stopped selling NFTs shortly after.
Other Chinese tech giants, such as Alibaba Group Holding, have been careful with their involvement with NFTs, with Chinese platforms usually substituting the NFT label with the term “digital collectibles,” which isn’t necessarily associated with cryptocurrencies.
Crypto-related activity has been pursued by the government on the mainland, which includes trading and investment. The government has raised concern that speculation might lead to bubbles within the market for digital assets, and promoted the state-issued digital currency. The existing regulations state that the tokens may only be purchased with Chinese fiat. They cannot be resold.
What do you think about the possibility of other NFT platforms being closed in China in the future? Leave a comment below.
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