NFTs Up to Getting Recognition as Virtual Property in China

• Earlier in 2021 China banned trading of cryptocurrency in the country.  

The concept of NFTs(Non-Fungible Tokens) after the introduction of Blockchains is becoming widely popular among crypto users. Data also states that NFTs are among the most favourite crypto products during the winter. 

According to recent reports, a court based in Hangzhou, China, noted that nonfungible tokens (NFT) are online virtual properties that should be protected under Chinese regulations. 

A Hong-Kong based crypto blogger noted in his Twitter post that “The Hangzhou Court of China pointed out that NFT digital collections have the characteristics of value, scarcity, controllability, and tradability, and belong to online virtual property, which should be protected by Chinese laws.” 

The People’s Bank of China (PBOC), which regulates one of the world’s major cryptocurrency marketplaces, declared all cryptocurrency transactions to be “illegal financial operations” on Friday, September 24, 2021, adding that the crypto business seriously threatens the protection of public assets.

The announcement prompted a massive panic sell-off of Bitcoin. Still, investors quickly shifted their focus to decentralized assets, significantly DEX tokens, in a blink of an eye, expecting a rise in DEX trading following China’s ban. For bitcoin pioneers who promote decentralisation as the future of money, the sudden shift in opinion might be a watershed moment. 

The Internet Court decided that it’s mandatory to confirm the legal attributes of the NFT digital collection” for a case and acknowledge that “Chinese laws currently do not stipulate” the “legal attributes of NFT digital collections.” 

The order of Court came after a user of a technology platform refused to complete a sale and cancelled their purchase of an NFT from a “flash sale” just because the customer provided the name and mobile number 

that allegedly didn’t match their information.

In the court statement, it was noted that NFTs condense the creator’s original expression of art and have the value of related intellectual property rights,” further, it was added that “unique digital assets formed on the blockchain based on the trust and consensus mechanism between blockchain nodes.” 

Noting this issue, the Court stated that “NFT digital collections belong to the category of virtual property,” and the transitions in legitimate cases are seen as the “Selling of digital goods through the internet,” which will ultimately be treated as an online/e-commerce business and “regulated by the E-commerce Laws.”

Earlier on May 16, 2022, TheCoinRepublic reported that The decision referred to Bitcoin as a virtual resource safeguarded by Chinese regulation and has monetary worth. In the genuine preliminary practice, the People’s Court has shaped a brought-together assessment of the legitimate place of bitcoin and recognized it as a virtual property, it said on its true WeChat channel. 

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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