Similar to WhatsApp, WeChat is a Chinese instant messaging app produced by the tech giant Tencent. You can chat, update status, play games, share locations, etc., on the app. Recently, they made moves to introduce a policy that prohibits the rendering of services related to NFT and cryptocurrencies on the app. This is coming after they suspended some accounts with links to crypto and NFTs. Violators will also be penalized if it’s discovered they provided guidance or sold cryptocurrencies to WeChat users. These also include accounts that enable initial coin offerings (ICOs). Why these moves? You may ask. This leads us to the next subtopic.
Cryptocurrencies & the Chinese Government
Just last year, the Chinese Government went beyond clamping down on crypto-related activities. They totally banned cryptocurrency trading and mining. However, other uses of blockchain technology and NFTs are exploited as long as the Government remains at the helm of affairs. There’s an existing infrastructure that can allow people and corporate organizations to make, buy and sell NFTs. In his statement, one of the top guns of Red Date Technology, He Yifan, said, “NFTs have no legal issues in China.” There’s a caveat, however.
As long as they have no links with cryptocurrencies such as Bitcoin and Ethereum that are banned in China. In June, Alibaba Cloud, a subsidiary of Alibaba launched about 16,000 NFTs solutions. All, via the Alipay mobile payments app, were sold in a matter of minutes. A spokesperson at AntChain, a blockchain subsidiary of Alibaba said, “NFT is not interchangeable, nor divisible, making it different by nature from cryptocurrencies such as Bitcoin.”
WeChat hopes to Forestall Crypto-Related Risks in the Space
Wang Yinying, a Chinese lawyer with a specialty in blockchain and Web3-related cases, gave the hint of a joint statement by the National Internet Finance Association of China, China Banking Association, and the Securities Association of China. He said the aim was to eliminate risks related to or rather associated with cryptocurrencies. In his words, he said, “the new rule’s emphasis is on the narrative that the secondary market for trading digital collectibles might incur speculation and instability of the financial market.”
Another senior analyst at research firm Trivium China, Bao Linghao, further explained that though there are no government-established regulations on NFT trading at the moment, “Tencent is acting preemptively to keep itself out of trouble.”
Furthermore, just recently again, Chinese financial institutions were instructed to stay clear of NFT’s use in securities, loans, precious metals, and insurance which were banned. China hopes to establish a kind of centralized platform that hosts secondary trading of NFTs. Unlike the open blockchains of Ethereum, consortium blockchains are what are being used in the People’s Republic to support digital versions of collectibles. Plus, these collectibles can only be bought with the Chinese yuan. The buyers must have real identities all in the bid to avoid money laundering activities.
In accordance with the guidelines provided by the regulators, accounts on WeChat must have existing contracts with (Cyberspace Administration of China) CAC’s certified blockchain companies if they must run primary transactions and display digital collectibles.
You may wonder what the approved blockchains are? Well, in 2019, top tech firms in China, such as Alibaba Group Holding, Baidu, JD.com, and Tencent, were among the first to be approved by CAC.
Other news about WeChat
January this year, Prime Minister Scott Morrison accused WeChat of freezing him out of his account since last year. Some quarters saw it as China’s move to suppress free speech by interfering with the upcoming federal elections. China and Australia’s diplomatic ties are already fraying, and this move added to the already bad situation.
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