Some of China's authorities are putting forward guidance on how to use the novel technology after concerns over the financial risks.
According to the 14th Five Year Plan on the digital economy published this week, the government of Shanghai supports the building of NFT exchanges.
An example for other regions can be found in the trial of the directive in the largest Chinese city by GDP, which is known for its economic openness.
The government wants NFTs to be used as a tool for protection of intellectual property. The plan wants the city to have a head start in researching and promoting the digitalization of assets like NFTs.
Authorities in China have been clear about their criticism of speculative NFTs. In April, China's top financial industry associations proposed that NFTs shouldn't be traded with Cryptocurrencies and that they shouldn't be used for Securitization.
OpenSea in China is effectively ruled out by these suggestions. The country does allow private, consortiumBlockchains. Some in China use the term "digital collectibles" to underplay the negative financial connotations of NFTs, where consumers can only make purchases using the country's fiat currency.
There is a lot of mention of the distributed ledger technology in the plan. It's expected. The president of China gave his personal support to the technology over the years.
The document calls the technology a "key technology" and puts it side by side with artificial intelligence, cloud computing, and big data, industries that have been supported by the authorities.
The use of distributed ledgers and smart contracts should be used to enable end-to-end payment transactions. The document says that the technology can be used for identity verification.
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