China’s state-backed Blockchain Service Network (BSN) plans to roll out infrastructure later this month to support the deployment of non-fungible tokens (NFTs), an important step in creating a Chinese NFT industry that is not tied to the cryptocurrencies.
Although Beijing has banned cryptocurrencies, He Yifan, CEO of Red Date Technology, which provides technical support to BSN, told the South China Morning Post that NFTs “don’t have any legal problems in China” as long as they distance themselves from cryptocurrencies. like bitcoin.
The infrastructure, called BSN Distributed Digital Certificate (BSN-DDC), to differentiate it from NFTs with cryptographic transactions, will offer application programming interfaces for companies or individuals to create their own user portals or applications to manage NFTs. Only Chinese yuan is allowed for purchases and service fees.
NFTs in China will have an annual output of billions in the future,” He said in an interview.
NFTs are launched and traded on public blockchains, which are decentralized platforms that provide access to anyone who wishes to write and read data. However, public chains “are illegal in China,” as the state requires all Internet systems to verify user identities and allow the regulator to intervene in case of “illegal activities,” He said.
As such, Red Date turned to a solution called permissioned open chain, an adapted version that can be governed by a designated group. BSN, the underlying platform of the NFT project backed by state-owned enterprises China Mobile, China UnionPay, and the State Information Center, has already “localized” more than 20 public chains since its debut in 2018.
He said that BSN-DDC will integrate 10 chains, including adapted version of Ethereum and Corda, in addition to national ones such as Fisco Bcos, started by Tencent-backed fintech firm WeBank.
Although NFTs are not illegal in China, several Big Tech companies have chosen to call their NFT projects “digital collectibles” for compliance reasons.
Ant Group, the fintech subsidiary of Post owner Alibaba Group Holding, and Tencent Holdings, were the first Chinese tech giants to adopt NFTs, launching dozens of products since last summer.
JD.com and Baidu followed with their own digital collectibles. Even the state media, Xinhua News Agency, jumped on the bandwagon and gave away more than 100,000 digital collectibles on Christmas Eve.
The BSN-DDC infrastructure has the potential to disrupt today’s industry. It has already attracted more than 20 partners, including blockchain network Cosmos, digital receipt system maker Baiwang, and video technology service provider Sumavision.
He said that compared to other single-venture platforms, BSN-DDC is cross-chain compatible and cheaper: issuing an NFT can be as cheap as 0.05 yuan (0.7 US cents). He said the project would turn a profit this year if it can help generate 10 million NFTs, “and actual production will exceed that based on our predictions.”
NFT is primarily used for digital artwork, but he said the biggest market is managing certificates, such as car license plates and school diplomas, as it’s a “revolutionary database technology” that can differentiate access from different parts to the data.
In NFT-based vehicle license plate management, the car owner, the government and the insurer have access to data such as mileage, engine number and repair history, and each knows the rights of the others, he said. I have.