By
Chimamanda U. Martha
April 17th, 2024
Despite that NFTs are not banned in China, stringent government policies have made it practically impossible, even for NFT businesses to thrive there.
China’s news giant Tencent has reportedly closed down one non-fungible token (NFT) platform of its two marketplaces. According to Blue Whale Finance which shared the news, the shutdown has all to do with the strict monetary policies of the Chinese government which has seen NFT sales suffer remarkably.
Tencent Retires NFT Trading Platform, Transfers Key Executives
According to local media reports, the shutdown process started in May after Tencent announced it would stop NFT sales beginning this month. By May ending, the firm had transferred all top executives running the affairs of the platform. And on July 1, the tech giant finally shut down its NFT platform completely.
Meanwhile, one such executive that was moved in May is the former Tencent News head Wang Shimu. Shimu transferred to Tencent Platform & Content Group (PCG). Here, he’s in charge of managing other platforms such as Magic Core – another NFT trading firm.
Presently, Magic Core itself is finding it difficult to stay afloat as sales have plummeted, to say the least.
Government Policies Blamed
Unsurprisingly, the decision of Tencent to fold up is being pinned on the government. Despite that NFTs are not banned in China, stringent government policies make it practically impossible for NFT businesses to thrive there.
The policy, for instance, does not allow buyers to resell their NFTs in private transactions. And this means that owning an NFT becomes a not-so-lucrative venture, killing any chance of making profits. For this reason, sales dropped significantly, ultimately leading to the demise of Tencent’s NFT platform.
In early 2022, there was a buzz around NFTs in China, just as it was on the larger global scale. That quickly caught the attention of several tech giants including the likes of Alibaba and Tencent who immediately showed interest. But as the NFTs were drawing the attention of tech bigwigs, they also caught the observing eyes of the government.
For what it’s worth though, the government did not outrightly ban NFTs as it did with cryptocurrencies. However, it issued several warnings that potential investors must be wary of the risks associated with NFTs.
So, to ensure that they are not in any way going against the Beijing government, many tech firms are deciding to stay away from NFTs altogether. All for the fear of a potential NFT-induced crackdown.