China’s parliament member calls for NFT regulations at ‘Two Sessions’
Non-fungible tokens (NFTs) will be a key subject of discussion in China’s Two Sessions meeting, with a regulatory framework to be deliberated upon by attendees.
Feng Qiya, a member of parliament, disclosed the plans to local news outlet STCN, saying that the deliberations could have far-reaching consequences for digital collectibles in the country. Feng pointed out that the changes will cut through technological and regulatory aspects to unify China’s burgeoning NFT industry.
“While the digital collection industry is developing rapidly, the current supervision is still based on industry self-discipline and local regulations, lacking a top-down supervision system coordinated by multiple departments, and the legal characterization of digital collections is still unclear,” Feng said.
Feng noted that the deliberations at Two Sessions would see attendees proffer solutions on improving interoperability between locally distributed ledgers. She highlighted the distinction between the local NFT market and the foreign-based market, saying that Chinese digital collectibles leveraged RMB transactions rather than digital currencies.
Digital currencies have been banned in Mainland China since 2021, but despite their prohibition, NFTs continued to thrive in the wake of a brutal crackdown. In the first six months of 2022, over 15 million digital collections were issued in China, reaching a valuation of 653 million yuan ($94 million).
Since NFTs traverse multiple sectors, Feng suggested that all interested regulators collaborate in issuing comprehensive NFT legislation. She argued that the legislation will clearly spell out the powers of each agency, with local financial supervisory departments leading the crackdown on illegal speculation while “preventing the financialization and securitization of digital collections.”
Apart from regulatory activity, stakeholders in China’s NFT ecosystem will be encouraged to forge industry alliances to promote self-discipline and self-regulation.
China’s Two Sessions is the country’s annual legislative meeting attended by thousands of delegates. It is currently in its 14th iteration and is closely watched by enthusiasts, given its reputation for predicting the direction of government policy.
Conferred with property rights
A Chinese court in Hangzhou declared that digital collectibles could enjoy property rights under the nation’s property laws. The decision eliminated all ambiguity surrounding the asset class following the blanket ban on digital currencies, laying a precedent for other courts to follow.
“NFT digital collections have the object characteristics of property rights such as value, scarcity, controllability, and tradability. At the same time, they also have the unique attributes of network virtual property such as network virtuality and technology, and belong to network virtual property,” the court stated.
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