Chinese web big Tencent has shut down considered one of two non-fungible token (NFT) platforms due to falling gross sales aided by the Chinese government’s regressive financial insurance policies.
Tencent shut down considered one of its NFT platforms on July 1, whereas the opposite is struggling to hold afloat. A report in an area newspaper means that the liquidation technique of the identical had began in May. The tech big moved the highest executives answerable for managing the NFT platform within the final week of May and utterly eliminated the collectibles digital part of its Tencent News app within the first week of July.
The important purpose for the slowdown in gross sales and the eventual shutdown of Tencent’s digital collectibles platform is attributed to defective government policy that forestalls patrons from promoting their NFTs in non-public transactions after buy, which makes these NFTs a lot. Doesn’t make it worthwhile. The lack of a secondary market eliminates any alternative to make a revenue from these digital collectibles.
NFTs gained loads of traction in China earlier this yr, with a number of tech giants reminiscent of Tencent and Alibaba exhibiting curiosity and even launching their very own digital collectibles platforms. However, with the rise in recognition, it additionally caught the eye of the government, which warned traders to be looking out for frauds involving these NFTs.
In March, a number of Chinese social media giants reminiscent of Weibo and WeChat started deleting accounts related to digital collectibles platforms for concern of government motion. In June, Alibaba launched an NFT platform, however quickly eliminated all point out of it from the Internet.
While the Chinese government is understood for its anti-crypto stance the place it banned all varieties of cryptocurrency transactions within the nation, there isn’t a absolute ban on NFTs. However, large firms and tech giants nonetheless stay cautious in concern of harsh motion by the Beijing government.
China-focused Twitter person Wu Blockchain informed Cointelegraph that Citizens nonetheless sells their NFTs in ‘underground’ secondary markets, however massive tech firms reminiscent of Alibaba and Tencent can’t afford to accomplish that.
China’s largest web firm Tencent has shut down considered one of its digital collectibles (NFT) platforms and the opposite platform is just not doing effectively. The purpose is that the Chinese government doesn’t enable customers to conduct non-public transactions after buy. https://t.co/VYWS3TxKUF
— Wu Blockchain (@WuBlockchain) 14 July 2022
Despite the ban on cryptocurrency buying and selling, mining, and the latter warning towards NFTs, Chinese merchants have all the time discovered a method round strict regulatory motion. For instance, following the nation’s ban on cryptocurrency mining final yr, the share of bitcoin (BTC) miners in China has dropped from 60% to zero. However, current knowledge exhibits that China has once more returned to second place, indicating that the miners have discovered a method out, regardless of the strict measures taken by the government. Similarly, the variety of NFT platforms within the nation has grown 5 occasions in 4 months.