Chinese social media giant Tencent Holdings has closed its non-fungible tokens (NFT) platform Huanhe after just one year of operation. The move comes as regulatory scrutiny of NFTs mounts in the country.
Huanhe was launched last Aug as a way for Tencent to cash in on the growing popularity of NFTs. However, the platform has been hit hard by China’s recent decision to outlaw secondary trading of digital collectibles.
Tencent retreats as pressure from regulators mounts
Per a report by Reuters, the move marks a major retreat by Tencent from the NFT market, which has come under increased scrutiny from Chinese regulators in recent months
China rolled out its central bank digital currency (CBDC) to the public during the 2022 Winter Games as a way of expanding the digital yuan pilot. In June, China’s digital yuan transactions amounted to 83 billion yuan. The total number of transactions amounted to 264 million, and more than 4.5 million commercial outlets signed up for the service.
Recently, the People’s Bank of China announced that 11 additional cities will be participating in its digital yuan pilot program. This means that residents in these areas will soon be able to use digital yuan wallets.
Meanwhile, other nations are only at the beginning stages of developing their own CBDCs. The United States has declared that it will begin the process of exploring a digital dollar. India, one of the world’s fastest-growing major economies, has also announced a study on a virtual rupee.
NFT is a type of digital asset that is used to identify items and phenomena in the blockchain realm. In the past few years, the NFT market has increased in popularity and has been used in a variety of applications. NFTs can be used to represent digital art, music, videos, or any other type of digital content. They can also be used to represent physical items, such as tickets or passes.
In terms of the legal framework, the transfer from physical assets to digital and electronic assets facilitates interchange. However, the difficulty is how to govern new sorts of economies. The Beijing government is naturally trying to catch up with the latest innovation.