At the upcoming Two Sessions meeting in China, non-fungible tokens (NFTs) will be a key point of discussion, with attendees engaging in deliberations regarding establishing a regulatory framework.
About the Sessions
Feng Qiya, a Member of Parliament, informed the local news outlet STCN of plans to bring about significant developments to the digital collectibles industry in China. As Feng highlighted, the discussion is geared towards unifying the growing NFT space by examining both the technological and regulatory implications.
At the Two Sessions, Feng noted the importance of enhancing interoperability between various locally distributed ledgers. She drew attention to the distinction between the Chinese NFT market, which is based on RMB transactions, and foreign-based markets, which use digital currencies. Furthermore, she suggested potential solutions to improve interoperability between these markets.
Despite the Chinese government’s prohibition on digital currencies in 2021, the non-fungible token (NFT) market has seen significant growth in the first half of 2022. With over 15 million digital collections issued, these assets have achieved a valuation of 653 million yuan ($94 million), demonstrating the resilience of the Chinese NFT market despite the crackdown.
Feng proposed that all relevant regulatory bodies collaborate in formulating comprehensive NFT legislation to ensure the proper functioning of the sector. She suggested that such legislation should clearly outline the responsibilities of each agency, with local financial regulatory departments leading the charge against any illegal speculation and preventing the financialization and securitization of digital collections.
Property Rights Conferred to NFT Owners
A Chinese court in Hangzhou has declared that digital collectibles can be granted property rights under existing property laws, removing the uncertainty surrounding this asset class after the ban on digital currencies. This decision could serve as a precedent for other courts to follow.
The court declared that NFT digital collections possess distinctive characteristics of property rights, including value, scarcity, control, and interchangeability. Simultaneously, they exhibit the exclusive traits of digital network assets including network virtuality and technological aspects and belong to the domain of digital network assets.