• China wants to protect its NFT traders.
• China intends to guarantee investor safety in NFT secondary sales.
• China continues to oppose cryptocurrencies.

China, which is notorious for maintaining a very restrictive policy towards the crypto sector, is making modest efforts to investigate the market for digital assets. China is getting ready to build an official, state-backed NFT marketplace that would allow Chinese NFT traders to experiment in the market while still being under the control of the Chinese government. 

The first of January will mark the marketplace's official opening. It will take place in Beijing, the capital of China, at a time when the COVID-19 crisis is plaguing the nation once more.

The programme, known as the 'China Digital Asset Trading Platform,' aims to develop a secure environment for the secondary sales of NFTs, which, if not controlled, can put purchasers at risk of frauds and hack assaults. 

China's Sina News said that three state-owned companies—China Technology Exchange, China Cultural Relics Exchange Center, and Huaban Digital Copyright Service Center Co., Ltd.—have jointly developed this NFT trading platform, keeping it compliant with Chinese laws and regulations. 

The Chinese government has chosen to base this NFT platform on a specifically curated blockchain known as the 'China Cultural Heritage Chain' rather than an existing blockchain like Ethereum or Solana. According to reports, the China Cultural Relics Exchange Center started the blockchain in order to guarantee the copyright protection of the digital cultural industry.

China put a complete ban on all crypto-related operations in September of last year. When it came to categorising NFTs, the government at the time had not made a firm decision.
China's second-hand digital collectibles sales had started to accelerate in this grey area. Tencent, WeChat's parent firm, suspended public accounts that were connected to NFT trading in March of this year. 

The WeChat public platform recently standardised and corrected public accounts and small programmes for speculation and secondary sales of digital collections, according to a statement released at the time by WeChat. This was done in order to reduce the risk of virtual currency trading speculation. 

China is gradually experimenting with the promise of blockchain technology despite tightening regulation on the virtual asset market. The nation has previously conducted extensive testing of the e-CNY CBDC, a blockchain equivalent of the country's fiat currency. 

The Chinese government just this week made it possible for CBDC users to send monetary presents to friends and family in the form of 'red packets.' The 'red packets,' also known as 'Hongbao,' are used to give individuals money as a sign of luck during festivals in the Asian country and are seen as a symbol of 'good luck.' Allowing cryptocurrencies to enter its financial systems is still not popular in China.