China aims to separate NFTs from crypto via new blockchain infrastructure
China plans to create a new blockchain infrastructure that is dedicated only to non-fungible tokens or NFTs. This new infrastructure will allow NFTs to be separated from Bitcoin and other cryptocurrencies which the same country has previously banned. This is done in China’s effort to crackdown the hidden cryptocurrencies without affecting its NFT market.
In a common scenario, NFTs are almost inseparable from crypto coins. That is because a lot of non-fungible tokens were made on the same blockchain as digital coins. Since the government of China didn’t want to have the country get left behind from the progressive emergence of NFTs, they decided to take this step.
The New Blockchain Infrastructure
China has a blockchain project called the Blockchain-based Service Network or BSN that is working on the new infrastructure that will separate NFTs from cryptocurrencies. It has been reported that this new blockchain infrastructure will allow companies and even individuals to be able to create platforms and applications. These platforms and applications will be used to manage NFTs without having any crypto coin interlinked with them.
The New Blockchain infrastructure will be called “BSN-Distributed Digital Certificate” or BSN-DDC for short. This project will include ten blockchains. Three of the most notable blockchains that will be included in the new infrastructure are Etheruem, Fisco Bcos, and Corda.
Its interface will enable the development of applications and platforms that support NFTs. Furthermore, fiat money will be used as a sole payment method to fill in the role of the cryptocurrencies in the NFT transactions.
Statement of the Red Date Technology head
BSN has a third-party tech company that provides the technical support for the project called “Red Date Technology”. It is headed by Yifan He who recently gave his statement on the new blockchain infrastructure. They will also work as the tech support for the new blockchain and thus, were able to provide some details on the BSN-DDC.
According to the Red Date Technology CEO, BSN-DDC will use a blockchain that is open-permission. Furthermore, this new project is very timely because China does need a low-cost but reliable blockchain infrastructure to host all the country’s existing and future non-fungible tokens.
The CEO also noted that they will provide the service to NFT businesses in Hong Kong. International NFT corporations can choose to take the Hong Kong Gateway to access the BSN-DDC and issue their non-fungible tokens.
Why China bans Cryptocurrencies
China is one of the many countries that have banned cryptocurrencies. Their reason is that cryptocurrency mining is said to be harmful to their environment. The Chinese government also claimed that there are cases of money laundering and fraud involving Bitcoin and altcoins. That is why it was best for the country to ban them altogether.
China did not fully ban cryptocurrencies in an instance. They took steps and phases before completely illegalizing the digital coins. In May 2021, China first prohibited banks and other financial institutions from processing any crypto transactions.
Then a month later, the Chinese government banned any form of crypto mining within the country’s territories. By September of 2021, cryptocurrency had become completely illegal in China. However, this ban is not applicable for NFTs which is why China is taking steps to separate them from cryptocurrencies.
* We hope this information will help you in your investment process, but this is not investment advice. Every investment carries risk, especially in this industry, so DYOR before making a decision.