Wuhan, a city in China, has reportedly paused its plans for NFTs. This is due to the regulatory uncertainty which surrounds Web3 technologies in China.
Wuhan first made known its plans for NFTs and the metaverse after the COVID-19 pandemic. The aim was to boost economic activity affected by the lockdown.
Besides, Wuhan was the city where the virus first began in 2019. The city’s industrial draft plan to grow its metaverse economy also talked about NFTs.
However, South China Morning Post reports that the government has omitted NFTs in the recent version of the draft. In addition, the local news media said the latest version asks businesses to pay attention to Web3 and decentralized tech.
Unfortunately, there was no mention of NFTs. With the revised version, Wuhan wants to pursue metaverse development. The city is ready to sponsor over 200 metaverse firms and have at least two metaverse estates by 2025.
Over the years, the Chinese government has embraced metaverse-related technologies. Besides, several cities in China have unveiled their metaverse development plans. Examples include Shanghai and Beijing.
The government also voiced its plan to support metaverse-driven firms at the beginning of the year. However, the case has been different for NFT-related firms that have faced great hostility from the government.
NFTs remain a grey area in the country. However, unlike crypto, the Chinese government did not place a ban on NFT usage and trading.
China Warns Residents About NFT Trading
However, authorities have warned residents about the risks of NFTs over time. At the start of 2022, the Chinese authorities tried to distinguish NFTs from crypto.
This aimed at allowing the NFT sector to grow despite the ban on cryptocurrencies. This sparked great interest in the country. Many citizens flooded the OpenSea NFT market with NFTs during the COVID-19 lockdown.
Meanwhile, the Chinese government believes there are wild speculations in the NFT market. These speculations could cause investors to waste their money on worthless NFTs.
Besides, the rise of NFTs has witnessed a corresponding increase in fraudulent operations. As a result, several government agencies have come out to warn users about NFT investments.
Furthermore, the Chinese government has not revealed if it will ban NFTs soon. However, several NFT platforms in the country have been treading carefully amid the uncertainty.
Alibaba-affiliated firms like Tencent Holdings and Ant Group have taken steps to protect their brands. Previously, the companies changed their listed NFTs to “digital collectibles.”
Also, they offered digital collectibles on private blockchains. In addition, users buy and sell the NFTs using the country’s national currency, the Yuan.
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