Alibaba and Tencent to Require KYC ID Checks for NFT Purchases

Decrypt | Andrew Asmakov | Jul 4, 2022

Tencent, Ant Group, Baidu,, and several other leading Chinese tech companies last week issued a “self-disciplined development proposal” for the “digital collectible industry” that would introduce real-name authentication for users that issue, buy, and sell non-fungible tokens (NFTs), according to a South China Morning Post report.

See:  NFT standards initiative led by Tencent approved by UN

According to a statement by the China Cultural Industry Association, the signatories of the agreement also acknowledged and reaffirmed the existing regulation which bans the use of cryptocurrencies, stressing that platforms offering digital collectibles—the term used in mainland China to describe NFTs—can “only support legal tender as the denomination and settlement currency.”

Digital collectible platforms should also hold relevant regulatory certifications, ensure the security of underlying blockchain technologies, and bolster intellectual property protection.

Although the document doesn’t mention the resale of NFTs, the initiative pledges to avoid setting up secondary marketplaces for NFT trading and “firmly resist speculation.”

“Different from most foreign platforms that apply NFT technology as financial products, domestic digital collections are more regarded as the category of digital cultural creativity,” the China Cultural Industry Association said.

The latest initiative for China’s NFT space originates from private companies and as such is not legally binding; however, it could still mark an important step toward more regulatory clarity. State agencies responsible for developing industry standards may take the proposals into consideration.

Last year, Chinese authorities cracked down on crypto businesses in the country, not only banning crypto transactions, but also forcing many Bitcoin mining operators to move abroad.

Read:  China’s Securities Regulator says ‘Web3 is key to the future of China’s internet’

The crackdown, however, was not extended on the NFT space, with China’s state-backed Blockchain Services Network announcing in January the creation of its own platform for launching tokenized digital collectibles—albeit running on permissioned, non-public blockchain infrastructure with no crypto transactions allowed.

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