(Rejected) Shanghai Intends to Set the NFT Ball Rolling in China

The government of Shanghai has revealed plans to support the non-fungible token (NFT) sector. 

This represents a change of tune based on the tough stance adopted concerning the crypto sector on Chinese soil. For instance, Chinese authorities intensified the crackdown on crypto mining from May 2021, citing an acute power shortage. As a result, 90% of China’s crypto mining capacity was hampered.

By supporting the NFT industry, Shanghai might serve as a leading example to other regions, given that it's the largest Chinese city based on GDP. Per the announcement:

“Leading companies to explore building NFT exchanges.” 

Shanghai’s government plans to use NFTs to enhance IP protection, which still faces challenges in the nation. Furthermore, more research will be channeled toward this industry.

The plan highlighted:

“The digitization of assets like NFTs, the global circulation of digital intellectual property, and the digital authentication of ownership.”

Shanghai also sees blockchain as a cutting-edge technology that ought to be merged with cloud computing, artificial intelligence (AI), and big data to revamp the fintech area. For example, smart contracts and distributed ledgers can enhance end-to-end transactions. 

Since NFTs are blockchain-based digital assets whose value is based on their uniqueness, they have been gaining traction globally. 

For instance, Etihad Airways recently revealed plans to release its first NFT collection aimed at boosting travellers’ satisfaction levels.

Therefore, NFTs are different from typical crypto tokens because of fungibility. A fungible token can be exchanged for another, whereas an NFT cannot be based on its finite nature.

Furthermore, NFTs are non-divisible and must be bought as a whole, and these traits help create their intrinsic value.