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Tencent Holdings plans shut down its non-fungible token (NFT) platform, which launched just one year ago, as Beijing’s strict ban on secondary markets for digital collectibles has largely killed its business potential, according to Chinese media outlet Jiemian.
Huanhe, the unit that mints and distributes blockchain-based digital collectibles, will close as soon as this week, according to the report, citing unidentified sources from Tencent.
Huanhe stopped all sales of NFTs on July 1 and its last post on its WeChat account was on June 27, according to the report.
China has made its stance on cryptocurrencies very clear but does not have specific rules on virtual assets such as digital collectibles and their derivatives, Guosheng Securities said in a note. Since the country has changed the term “NFT” to “digital collectibles”, virtual assets’ legal nature and the authorities in charge will gradually be determined, the brokerage said.
Since last year, major Chinese tech firms have launched NFT-related platforms. Apart from Tencent’s Huanhe, Ant Group launched a digital collectible platform called Topnodon its AntChain in late 2021, while e-commerce giant JD launched an NFT platform called Lingxi last December.