Banking Associations in China Propose Guidelines on NFTs

In a statement published on Wednesday, three Chinese banking institutions said they want to limit the risks associated with NFT’s.

The China’s Internet Financial Association, the China Banking Association and the China Securities Association stated they want to “resolutely curb” the characteristics of non-fungible tokens (NFTs) to be made into financial products and securitized tokens, while mitigating potential illicit use of.

The statement detailed that NFTs potentially promote “the digitalization of industries and digital industrialization,” while warning against risks associated to hyping the assets, money laundering and other illegal financial activities.

The Banking associations released six guidelines to be followed.

• NFTs cannot represent any underlying assets like precious metals or securities
• NFTs cannot be divided (non-fungibility to remain)
• There should be no centralized trading of the tokens
• NFTs should not be priced in cryptocurrencies
• Platforms need to have KYC in place; real-name authentication and anti-money laundering checks
• There can be no financing support for investments in NFTs.

Although China seems to be tightening regulations on NFTs. Major firms in the country such as Ant Group and Tencent, continue to issue NFTs.