Chinese social media giant Tencent Holdings has closed its non-fungible tokens (NFT) platform Huanhe after just one year of operation. The move comes as regulatory scrutiny of NFTs mounts in the country.
Chinese internet giant Tencent Holdings’ non-fungible token (NFT) platform Huanhe will no longer release digital collectibles to the public, it said on Tuesday, as regulatory scrutiny of NFTs mounts in the country. The company said that owners of existing collectibles will still be able to hold, display or request a refund for their possessions.
“Based on the company’s consideration to focus on its core strategy, Huanhe is making adjustments to its business,” Tencent said in a statement.
The Shenzhen-based company’s Huanhe was launched last Aug as a way for Tencent to cash in on the growing popularity of NFTs. However, the platform has been hit hard by China’s recent decision to outlaw secondary trading of digital collectibles.
Tencent retreats as pressure from regulators mounts
Per a report by Reuters, the move marks a major retreat by Tencent from the NFT market, which has come under increased scrutiny from Reuters in recent months. Digital collectibles in the form of NFTs have become popular around the world in recent years, in large part thanks to an active if not highly speculative secondary market.
After state media repeatedly highlighted issues around NFT speculation in the country, tech giants including Tencent and Ant Group in June signed a pact to stop the secondary trading of digital collectibles and “self-regulate” their activities in the market.
The potential shutdown of Huanhe was first reported by Chinese media last month. In its statement on Tuesday, Tencent did not elaborate on what will happen to the Huanhe brand.
Chinese tech giants have trodden carefully with their NFT platforms within mainland China. Most domestic platforms mostly avoid the wording NFT, opting to describe them as “digital collectibles” instead in a bid to distance them from cryptocurrencies, which are banned in China.
China Moves on Cryptocurrencies
China rolled out its central bank digital currency (CBDC) to the public during the 2022 Winter Games as a way of expanding the digital yuan pilot. In June, China’s digital yuan transactions amounted to 83 billion yuan. The total number of transactions amounted to 264 million, and more than 4.5 million commercial outlets signed up for the service.
Recently, the People’s Bank of China announced that 11 additional cities will be participating in its digital yuan pilot program. This means that residents in these areas will soon be able to use digital yuan wallets.
Meanwhile, other nations are only at the beginning stages of developing their own CBDCs. The United States has declared that it will begin the process of exploring a digital dollar. India, one of the world’s fastest-growing major economies, has also announced a study on a virtual rupee.
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