The Chinese Communist Party has issued a warning about the NFT hype bubble.

The party's spokeswoman, a local news source, predicted a significant drop in the value of NFT assets after the bubble bursts. Despite the fact that two of China's top IT businesses are pursuing the technology, the Chinese government has issued a series of remarks decrying the value of the nonfungible token, or NFT, market, according to local sources.

The Securities Times — a news publication service that acts as a spokesperson for the official Chinese Communist Party magazine People's Daily — broke the story first, and the South Morning China Post reported on it.

According to the remarks, “it is common sense that there is a massive bubble in NFT transactions,” and that most NFT buyers who buy for a financial reason are only interested in the asset value rather than the piece's visual attributes.


Wang Junhui, an SMCP staff reporter, writes:

“As market enthusiasm fades and the hype subsides, the value of these numerous weird NFTs will plummet.”

This echoed People's Daily's rhetoric from June, which said that the NFT market "may be pumped up, leading to instability," and that "decentralization may lead to security issues."

Earlier this year, the Chinese government dealt a devastating blow to cryptocurrency mining operations in an effort to drive unfavorable activities out of the country.

Tencent Holdings and Alibaba Group Holdings, two of China's largest internet companies, have advanced with NFT-focused research and development activities and are now active participants in the area.

Tencent launched its NFT trading platform Huanhe last month with the goal of integrating NFT assets into its QQ Music music streaming platform.

Similarly, Ant Group, Alibaba's fintech partner, recently posted two NFT photos for sale in its Alipay wallet application.

Despite this, Chinese proponents of the NFT face restrictions in their trading activity. For example, only the Renminbi, the country's official currency, can be used in transactions. Furthermore, NFTs cannot be resold after purchase because doing so would be a violation of the country's financial regulations.

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