China Embarks on State-backed Blockchain Infrastructure for NFTs
The government of China is on track to rolling out a native blockchain infrastructure that will support the development of Non-Fungible Tokens (NFTs). According to reports, the project which is championed by the state-backed Blockchain Services Network (BSN) plans to achieve this goal by the end of January 2022.
There is a demarcation between blockchain technology and cryptocurrency in China. Despite the ban on cryptocurrency activities, blockchain technology is promoted in China. Therefore, the proposed blockchain infrastructure will support the development of the NFT industry but will not be linked to cryptocurrency.
NFTs are finding a base in China with some of the major tech companies venturing into it. Alibaba, Tencent, and Bilibili are some of the top three major companies that have implemented the technology. However, in doing so, they have consciously distanced themselves from cryptocurrencies by referring to their NFTs as digital collectibles. These companies know and understand how cryptocurrency activities are no longer welcome in China.
The demarcation has become necessary considering the global perception of value that is based on the blockchain. Like in digital finance, the common denomination across the blockchain industry is cryptocurrencies. Even on most NFT marketplaces, collectibles are denominated in one form of cryptocurrency or the other. What is happening in China is both eye-opening and educative, creating the awareness that value on the blockchain can be in different forms and denominations.
By distancing themselves from cryptocurrencies is the only way that companies willing to offer NFTs can do so in China without encountering some legal issues. This opinion is acknowledged by He Yifan, chief executive of Red Date Technology, which provides technical support to BSN. Yifan explained that as long as NFTs distance themselves from cryptocurrencies like Bitcoin, they will not have legal issues in China.
The proposed blockchain infrastructure is named BSN-Distributed Digital Certificate (BSN-DDC). The platform will offer application programming interfaces for businesses or individuals. This will enable them to build their user portals or apps to manage NFTs. The currency for transactions on the BSN-DDC will be strictly the Chinese yuan. It will be used to make purchases and pay for service fees.
The Chinese NFT market is expected to grow significantly soon. Apart from the global appeal of the emerging NFT market, the ban on cryptocurrencies has pushed the digital generation in China towards NFTs. Many Chinese users who are shifting away from cryptocurrencies find NFTs as a close relationship that they can easily adapt to. People who are already used to the online trading of cryptocurrencies could easily find NFT trading as a close option. Yifan believes that the annual output of NFTs in China will run into billions in the future.
The BSN-DDC is expected to arrive with a disruptive attitude. Even before launch, it has already attracted more than 20 partners. Cosmos blockchain network, Baiwang, and Sumavision are some of the technical partners already involved with the BSN-DDC project. The developers of the project are upbeat about its expected adoption and profitability. Perhaps, the current enthusiasm about NFTs is a source of confidence that this project will be a huge success.
Unlike the general perception of NFTs representing only rare artworks, the BSN-DDC will deploy also for certificate management. Car licenses and school diplomas are some of the kinds of certificates expected to be issued on the proposed infrastructure. The cost of issuing will also be as cheap as 0.05 yuan, and the developers expect that up to 10 million NFTs will be issued within the first year of the project.