Wuhan drops NFTs from metaverse amid regulatory uncertainties in China

New York City: According to recent reports, the city of Wuhan in China has abandoned its ambitions to create nonfungible tokens (NFTs) due to the increasing legislative uncertainties around cryptocurrencies and Web3 technologies in the nation.

Following the outbreak of the coronavirus, Wuhan made the first announcement of its intentions to promote the metaverse and NFTs as a means to revive its economy, which had been severely damaged by the pandemic. The city served as the hub of activity during the COVID-19 outbreak.

There was a mention of NFTs in the preliminary version of the government of Wuhan’s industrial strategy for the growth of the city’s metaverse economy. According to a report published by the South China Morning Post, that particular section of the document has now been removed from the most recent edition. According to the article, the amended version continues to advocate for companies to concentrate their efforts on decentralized technology and Web3, but it makes no mention of NFTs.

Under the newly revised plan, Wuhan aims to foster more than 200 metaverse companies and build at least two metaverse industrial estates by 2025.

Taking a look at the amended version of the text, it would seem that the Chinese government has eliminated anything that involves the trading of tokens or digital assets. The position has become crystal obvious throughout the years thanks to the inclusion of technology connected to the metaverse in the development plans of the government. For instance, a number of Chinese cities, such as the nation’s capital of Beijing and Shanghai, have stated their ambitions to innovate the metaverse; nevertheless, any private businesses or technology behemoths working with NFTs have encountered criticism from the Chinese government.

In spite of the country’s general prohibition on cryptocurrencies, China’s government said at the beginning of the year that it planned to differentiate non-fungible tokens (NFTs) from cryptocurrencies in an effort to facilitate the expansion of the fledgling sector. This caused a surge in interest among Chinese groups, which led in the cryptocurrency marketplace NFT Opensea being inundated with listings from Shanghai while COVID was under lockdown.

However, with with the surge in popularity came an increase in the number of fraudulent operations, which resulted in the government issuing many cautions to investors to steer clear of NFT trading.

Following a number of years during which several limitations were placed on the usage of cryptocurrencies inside the nation, China ultimately decided to implement a complete ban on their use in 2021. However, the government’s stance on emerging Web3 technologies, especially those that involve the exchange of tokens or digital collectibles (NFTs), seems far from clear at the moment.