China reportedly building state-backed blockchain infrastructure for NFT industry

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China is reportedly planning to launch its own infrastructure to support the deployment of NFTs in an attempt to create an industry not linked to cryptocurrencies.

A South China Morning Post said state-backed Blockchain Services Network would create the infrastructure "BSN-Distributed Digital Certificate" (BSN-DDC) to differentiate it from crypto-transacted NFTs. Currently, all cryptocurrency transactions are illegal in China. The new infrastructure will offer application programming interfaces for companies and individuals, enabling them to build their own user portals or apps to manage NFTs.

SCMP said only renminbi is allowed for purchases and service fees on this platform.

Public chains are not legal in China as the country requires Internet systems to verify user identities and allow regulators to intervene in illegal activities. The report said to address this issue, Red Date Technology, which provides technical support to Blockchain Services Network, offers the open permissioned chain and it could be governed. Since its inception in China, it has localised more than 20 public chains already.

Red Date Technology's chief executive said He Yifan that BSN-DDC will integrate 10 chains including the adapted version of Ethereum, in addition to Fisco Bcos initiated byWeBank, a Tencent-backed fintech.

Although public chains are not legal in China, NFTs, other the other hand, are legal. Chinese tech firms such as Alibaba and Tencent launched "digital collectibles" last year to embrace the trend of NFTs, but using the name "digital collectibles" for compliance reasons. Last month, JD.com also has launched a blockchain-backed platform to sell digital collectibles similar to NFTs too. Its Lingxi platform and an initial batch of NFTs inspired by JD.com’s mascot Joy were launched with at least 2,000 pieces of each of its five mascots being sold out.

NFTs are popular in the world in recent months. Recently, according to NFT online marketplace OpenSea, the NFT projects of Taiwanese singer Jay Chou and Hong Kong actor Edison Chen are popular on the platform, with Chou's NFT even topping the list.

Chou-backed fashion brand PHANTACi launched PhantaBear, a total of 10,000 NFTs on 1 January. At the time of writing, PhantaBear is the top project on OpenSea by sales volume in the past 24 hours. On 11 January, it was trading at an average price of 5.88 Ethereum (US$18,399) when its average price was still below 1 Ethereum on 1 January.

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