Huanhe, one of China’s most popular NFT platforms, decided to stop the release of digital collectibles, earlier this month. Huanhe is the non-fungible token (NFT) platform of Tencent Holdings, the Chinese Internet powerhouse. Huanhe was launched early in the month of August last year. The company does not wish to release new NFTs to customers from this month. However, owners of existing NFTs can retain, display, or request a refund for their possessions.
Significance of the move
Tencent’s action represents a significant retreat from the NFT industry, which is now the subject of greater scrutiny from Chinese regulators. In recent years, digital collectibles in the form of NFTs have gained popularity across the globe, largely due to an active, if not extremely speculative secondary market.
Tech companies like Tencent and Ant Group struck a deal in June to halt the secondary trade of digital artifacts and “self-regulate” their market activities. This move came after state media repeatedly raised issues surrounding NFT speculation in the country.
Representatives of Tencent remarked that Huanhe had taken this step to focus on its core strategy. It was referred to as an adjustment in their business strategy. Tencent did not release any statement on the fate of the Huanhe brand after this major event. It is pertinent to note that Chinese tech companies have started treading carefully in the NFT market while domestic companies are mostly avoiding stepping into the world of NFTs. Most of these companies are describing NFTs as ‘digital collectibles’ to distance them from the world of cryptocurrencies.