Chinese Banking Associations Target NFTs

China’s Internet Financial Association, the China Banking Association and the China Securities Association want to “resolutely curb” the tendencies of non-fungible tokens (NFTs) to be made into financial products and securitized and to limit the risk of illegal financial activities related to the tokens, the group said in a statement published Wednesday.

Nearly one year ago, two of these self-governing bodies prefigured one of the most severe crackdowns in China. when they told their members that they are forbidden from conducting business with crypto companies. Just days later, the State Council – the country’s chief administration body – called for a crackdown on crypto mining and trading.
In Wednesday’s statement, three associations claimed that NFTs can promote “the digitization of industries and digital industrialization”, but warned against financial risk related to hyping these assets, money laundering, and other illegal financial activities.
Chinese authorities have previously highlighted financial risks associated with hype and speculative trades as reasons for crackingdown on crypto more generally.
These associations outlined six principles that should be observed: NFTs are not underlying assets such as securities or precious metals; they don’t represent underlying assets; pricing and settlement of NFT transactions shouldn’t include cryptocurrency; platforms must perform real name authentication and anti-money laundering checks; there shouldn’t be any financial support for NFT investments.
Despite China’s efforts to ban crypto, major companies continue to issue NFTs. government bodies. In October, Ant Group Tencent, two of China’s biggest tech companies, renamed their NFT products to “digital collectibles,” likely to distance their offerings from NFTs and the associated market hype.
State media and local authorities have also periodically issued warnings over the NFT market.
Wednesday’s statement urged consumers to be cautious about speculative investment and avoid illegal financing.
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