Alibaba, Tencent, and other Chinese players are betting big on the metaverse — but the government is yet to buy into the hype
- An executive from China’s central bank has cautioned against NFTs and the
metaversefor the role they play in funding illegal activities.
- The industry in China has been bullish on the metaverse, with many registering trademarks and announcing plans of building out digital assets for the virtual world.
Alibabaand Tencent, two of the biggest tech giants in the country, rebranded their NFT offerings as ‘digital collectibles,’ seemingly to avoid the ire of Beijing.
This even as industry leaders in the country — including the Ant Group and Tencent Holdings — remain bullish on the opportunities that the metaverse presents.
At a financial forum held in Shanghai last week, the director of the anti-money laundering unit of the People’s Bank of China (PBoC) — Gou Wenjun — warned that such virtual assets could be used to launder money and have, in the past, been used for illegal transactions like drug trafficking, gmabling, terrorism finance and tax evasion.
These are naturally isolated from the real world and have a certain degree of interoperability, making it extremely easy to become money-laundering tools for outlaws.
The metaverse in China is not entirely without regulation. According to Gou, more than 50 jurisdictions across the country are in the process of or already have established a regulatory framework to address NFTs and the metaverse — this includes setting a licensing system, so that there’s a record of the owner and operators of these enterprises for the Chinese government to reference.
Ant Group and Alibaba are pumping money into the metaverse
China has not been isolated from the global trend of the metaverse coming in vogue. The industry is bullish with some excited about the opportunities it could provide, with others anxious about not being able to keep up.
The likes of Tencent, Alibaba, Baidu and NetEase have all rushed to apply for dozens of trademarks related to the metaverse, according to the South China Morning Post citing data from the business registration tracking platform, Qichacha.
“When the metaverse eventually arrives… We’ll probably be the fastest runners around,” said gaming giant NetEase’s founder and CEO, William Ding Lei, during the company’s third-quarter earnings call in November.
Meanwhile Tencent disclosed that its outlook for the metvase includes approaching the new technology through a ‘range of businesses’, with a focus on its implications on video games and social networks.
But, they’re also being cautiousAccording to Tencent’s president, Martin Lau, the officials in China aren’t ‘fundamentally adverse’ to the concept of the metaverse. However, there are likely going to be a set of guidelines to regulate the sector different from the rest of the world.
Tencent Holdings rolled its NFT trading platform called Huanhe, in August. The Jack Ma-founded Ant Group, known for its affiliation to the Alibaba Group, launched an NFT wallpaper for Alipay users in June and followed that up with introducing NFT artworks as well, including digital painting and virtual version of antiques.
“There will be more brands trying out the metaverse and NFTs in their marketing campaigns, either by working with digital platform players like Alibaba or Tencent or by themselves (with the help of digital agencies) like the SK-II CITY campaign,” Xioafeng Wang, the principal analyst at consultancy firm Forrester, told the marketing publication Campaign Asia.
Despite their interest in the space, both — Alibaba and Tencent — took a step of caution in October and rebranded their NFT offerings as ‘digital collectibles’.
Meanwhile, gaming studios in China are cashing in on the metaverse trend
Until China doesn’t drop the hammer on NFTs and the metaverse, gaming companies are taking in any quick gains that they can.
Two days later, when Zhejiang Jinke Tom Culture Industry — the company behind the immensely popular children's game Talking Tom — announced that it was developing metaverse games, the company’s stock also jumped by 20%, triggering another trading halt.
And, the same trend followed when Boton Technology made a similar announcement.
One should note that none of these games are public yet, nor are there any conclusively concrete plans in place for what may be in store. All three maintain that they’re merely ‘exploring’ the multiverse concept and there is no final product in place.
And, while they saw pumps in their share price on announcing plans for the metaverse, all three have registered drops exceeding 5% after Gou’s comments.
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