The Chinese Communist Party warns of NFT hype bubble

According to local sources, the Chinese government has issued a series of statements condemning the value of the non-fungible token or NFT market, even though the country’s two major technology companies are seeking the technology.

This story was originally published locally by the Securities Times – a news publishing service organization that is the spokesperson of the People’s Daily, the official media of the Communist Party of China – and Report South Morning China Post.

The statement claimed that “it is common sense that there is a huge bubble in NFT transactions” and that most NFT buyers who purchase financially motivated only focus on the value of the asset, rather than the visual quality of the work.

SMCP reporter Wang Junhui wrote:

“Once the market enthusiasm fades and the hype cools, the value of so many strange NFTs will be greatly reduced.”

This echoes the remarks made in the June issue of People’s Daily, who pointed out that the NFT market “may be hyped up and cause chaos, and decentralization may lead to security issues.”

Earlier this year, the Chinese government Has dealt a heavy blow to the crypto mining business Deliberately drive unfavorable activities out of its borders.

However, China’s major technology companies Tencent Holdings and Alibaba Group have made progress in NFT-focused R&D programs and are now actively participating in the field.

Last month, Tencent launched the NFT trading platform Huanhe, aiming to integrate NFT assets into its music streaming platform QQ Music.

Similarly, Alibaba’s financial technology partner Ant Group recently listed two NFT images for sale in its wallet app Alipay.

Nevertheless, the trading activities of Chinese NFT advocates are still restricted. For example, only the official currency of the country can be used for transactions. In addition, once the NFT is purchased, it cannot be resold because it would violate the country’s financial laws.