China Proposes Supervision for NFT and Metaverse

China’s crypto crackdown is about to take a new dimension as the Asian country’s central bank, the People’s Bank of China (PBoC), has hinted that it wants to include the burgeoning crypto niche NFTs and the fast-growing Metaverse under the lists of assets it wants to start monitoring.

Chinese Official Wants NFTs to be Monitored

During the national financial security summit, Gou Wenjun, the director of the Anti-Money Laundering (AML) unit at the People’s Bank of China, highlighted the risks associated with leaving the sectors in question unregulated. 

Wenjun stated that individuals, usually, use these evolving innovations for different purposes. According to him, while some are interested in using these technologies to rake in profits, others might be interested in using them for illegal activities.

As such, he believes it would be risky to leave these fast-growing blockchain innovations free of government supervision, because they could end up being used as a money-laundering tool by criminals.

The government official went on to propose that the agency be allowed to “clarify the division of supervisory responsibilities, improve the transparency of virtual assets, and explore the use of supervisory sandboxes to study and judge the essence and nature of virtual assets.”

He also proposed that China strengthen its KYC policy involving digital assets transactions so that service providers would authenticate the names of participants in a transaction in order to better identify suspicious transactions.

He further added that new technologies should be improved upon to allow authorities to be able to trace a crypto transaction so that those transacting with suspicious addresses can also be identified.

China’s History With Crypto

One of the country’s that has repeatedly and publicly maintained its anti-crypto stance is China, who as recently as this year ordered a nationwide ban on all crypto-related transactions while threatening defaulters with sanctions.

Not only that, authorities in the country also began a crackdown on crypto mining activities citing the negative environmental impact this has on the planet as to why it would no longer welcome such activities in its jurisdiction again. 

This unfriendly policy has led many crypto-related firms operating in the country to either close shops or move their businesses outside its shores.

Interestingly, China’s crypto ban has had a positive effect on the industry as it has led to the decentralization of mining activities away from one spot. Today, countries in North America, Kazakhstan and, Russia now contribute a large quota towards the ascent of Bitcoin mining hashrate to its previous heights.

Also, despite the ban by China, the crypto industry’s market cap recently touched the $3 trillion market cap with assets like Bitcoin, Ethereum and, others touching new ATH —a sign that the industry no longer depends on China like it used to.

What This Means for Chinese NFT Enthusiasts

China has undoubtedly been able to cement itself as a hub of technological innovation and development with its citizens mostly leading the pack when it comes to tech adoption.

This is no different in the case of the burgeoning NFT space where Google trends data has revealed that the Asian country is one of the top three countries in the world to have made the most searches for the term “NFT.”

With Chinese authorities hinting about surveilling the space, it simply means that citizens of the countries could have a limited access to the potential of a $1 trillion space, according to data from Grayscale.

Judging by the past history of the government, it also means that a total crackdown of the space is not entirely off the table, which could mean that the Asian country would be barring its citizens from a multimillion-dollar opportunity.