(Kitco News) -
China is preparing to launch the first legally-compliant secondary trading platform for digital assets across the country on Jan. 1, according to local news reports.
The ‘China Digital Asset Trading Platform’ was jointly built by state-owned China Technology Exchange and China Cultural Relics Exchange Center in partnership with Huaban Digital Copyright Service Center, a private company.
The China Digital Asset Trading Platform relies on the national-level exchange infrastructure of the China Technology Exchange, a national intellectual property rights trading institution jointly established by the Ministry of Science and Technology, the State Intellectual Property Office, the Chinese Academy of Sciences and the Beijing Municipal People's Government. The China Technology Exchange manages the trading functions of the exchange and offers a comprehensive and standardized trading system for digital assets, including processing and safe settlement mechanisms across the transaction process.
The China Digital Assets Trading Platform uses the China Cultural Heritage Chain for the trading of digital assets, which provides digital asset registration, confirmation of rights, deposit certificates, rights protection monitoring, and copyright protection services for institutions and individual users. The China Cultural Heritage Chain is designed to promote the deep integration of blockchain technology applications and cultural digital copyright protection.
Yu Jianing, co-chairman of the Special Blockchain Committee of the China Communications Industry Association, said that the launch of the China Digital Assets Exchange represents the acceleration of the digital transformation process of the country's cultural industries, and shows that the pace of growth for data capitalization and asset digitization is increasing. Yu also acknowledged that the development of digital assets in China currently faces several problems such as technical limitations, collection valuation and copyright disputes.
“In terms of industry supervision and compliance, digital collections are a new type of business, and laws, regulations and regulatory policies will be gradually improved, so there are some uncertainties,” Yu said. “Platforms have clear responsibilities for the issuance and trading of digital collections. Compared with intellectual property rights and digital copyrights, digital collections face greater compliance risks.”
Earlier this month, a ruling by the Hangzhou Internet Court established the precedent that nonfungible tokens (NFT) constitute online virtual property and will be recognized under Chinese law.
The court found that NFTs “have the object characteristics of property rights such as value, scarcity, controllability, and tradability” and “belong to network virtual property” meaning that they “should be protected by the laws of our country.” Their definition of NFTs set an important and far-reaching precedent for digital property in China, and further distinguished NFTs from cryptocurrencies and removing digital properties from the gray area they’ve existed in since China moved to make cryptocurrencies illegal in Sept. 2021.
