Huanhe, a Non-Fungible (NFT) platform owned by Tencent Holdings Ltd has announced that it will no longer release digital collectables to the public as regulatory scrutiny of NFTs elevates in China.
Tencent stated that although Huanhe will no longer release new NFTs to users, owners of existing collectables will still be able to hold, display or request a refund for their possessions.
The company said in a statement, “Based on the company’s consideration to focus on its core strategy, Huanhe is making adjustments to its business.”
Considering Huanhe is one of China’s biggest NFT platforms, this move marks a major retreat by Tencent from the NFT market which has, ever since it arrived in the country, come under increased scrutiny from Chinese regulators, along with metaverse projects.
However, thanks to an active and highly speculative secondary market, digital collectables in the form of NFTs have become popular around the globe in recent years.
After state media repeatedly highlighted issues around the speculation of NFT in China, tech companies like Tencent and Ant Group signed a pact in June to halt the secondary trading of digital collectables as well as “self-regulate” their activities in the market.
Behemoth Chinese tech companies have trodden carefully with NFT platforms in mainland China. The majority of domestic platforms mostly avoid wording NFT, choosing instead to describe them as ‘digital collectables’ in an attempt to separate NFT from cryptocurrencies, which are banned in China.