China-based Tencent Holdings plans to shut down its Huanhe non-fungible token (NFT) platform just a year after its launch. The social media giant reportedly made this decision due to Beijing’s strict ban on NFT resale.
Huanhe to close a year after launch as China restricts NFT resale
Tech conglomerate Tencent, headquartered in Shenzhen, is preparing to close its NFTs platform as early as this week, according to Chinese media Jiemian, quoted by the South China Morning Post. The move comes amid restrictions on NFT secondary trading in the PRC, which are said to have hurt the platform’s business potential.
Zemian cites unnamed sources at Tencent, but the company has refrained from making official comments on the matter. Huanhe, which produces and distributes blockchain-based digital collectibles, was launched just a year ago.
All NFTs in the app are already marked as “sold out”, although users can still visit the AR art exhibitions. Another report, citing another Tencent source from state media Yicai Global, shows that trading was halted in early July in anticipation of a crackdown.
Huanhe was developed by Tencent Platform and Content Group (PCG), which was hit hard by layoffs earlier this year. If the NFT division goes out of business, it would mean a major exit for Tencent from the digital collectibles market, SCMP said.
In June, Tencent’s social media app Wechat announced its intentions to ban public accounts that facilitate secondary trading or offer recommendations for non-fungible tokens. A little later, the Tencent News app stopped selling NFTs.
Other Chinese tech giants, such as Alibaba Group Holding, have been cautious about their involvement in NFTs, as Chinese platforms commonly replace the NFT label with the term “digital collectibles,” which is not necessarily associated with cryptocurrencies.
The government on the mainland is involved in crypto-related activities, including investment, trading, and mining. He highlighted concerns that speculation could lead to bubbles in the digital asset market as the government’s digital yuan is promoted. According to the existing rules, tokens can only be purchased with Chinese fiat money and never resold.
Do you expect other NFT platforms in China to close in the near future? Tell us in the comments section below.
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