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China launches a state-backed NFT platform unrelated to cryptocurrencies

China’s state-backed Blockchain Services Network (BSN) announced the soft launch of a nationwide infrastructure to support Chinese non-fungible tokens (NFTs) on Tuesday, marking a significant step toward the development of a domestic industry separate from the global market and unrelated to cryptocurrencies.

The BSN-Distributed Digital Certificates (BSN-DDC) infrastructure, according to BSN, would provide enterprises with “a varied, transparent, credible, and reliable” one-stop shop for minting and managing their own NFTs without relying on cryptocurrencies, which are prohibited in China. The ethereum blockchain is used by the majority of NFTs throughout the world. The BSN-DDC will be officially launched in late March, according to BSN, which is supported by state-owned telecoms giant China Mobile, state-run payment processing provider China UnionPay, and government think tank State Information Centre.

The blockchain unit of accounting company Ernst & Young, Digital Art Fair Asia, and the Hainan International Culture and Artworks Exchange Centre are among the 26 founding partners. Digital assets that are authenticated and exchanged on public blockchains are known as NFTs. In China, NFTs are not illegal, and several tech companies, including South China Morning Post owner Alibaba Group Holding’s fintech affiliate Ant Group, Tencent Holdings, JD.com, and Baidu, as well as the official Xinhua news agency, have launched them under the name “digital collectibles.”

However, in China, where the government requires all internet systems to verify user identities and allow regulators to intervene in the event of illegal activities, public blockchains, which are decentralised platforms, are “illegal,” according to He Yifan, chief executive of BSN technical support provider Red Date Technology, in an interview with the Post earlier this month.

To address this issue, BSN turned to an altered version of blockchain known as the open permissioned blockchain (OPB), which can be regulated by a selected group. The BSN-DDC has already merged with ten OPBs, including customised versions of the ethereum and Corda blockchains, as well as domestic blockchains like Fisco Bcos, which was launched by Tencent-backed fintech business WeBank.