China’s Regulated NFT, Non-Fungible Rights (NFR)

NFR solves the legal problems of digital transactions as its development conforms to Chinese laws and regulations, requires a third-party evaluation, and uses the real name system.

 

Key Takeaways

  • China allows individuals and businesses to use the Chinese Yuan to make, sell and buy NFTs.

  • NFTs are an evolution of cryptocurrency's relatively simple concept by making each token unique and irreplaceable.

  • NFR has developed a model for digital certificates. It is mandatory for a third party to evaluate, test, and certify the product.

Introduction

In the Crypto community, China is known for banning Cryptocurrencies. It started with banning banks from crypto transactions in 2013 to a complete ban of crypto trading and mining in 2021. But do you know that China allows individuals and businesses to make, sell and buy NFTs? They would use the Chinese Yuan instead of cryptocurrencies to transact.

In October 2021, the State Council officially released the "NFR Whitepaper." Subsequently, it hosted a live show with the theme "Digitalization Makes People Prosperous Together" to educate people on using NFR to protect their legal rights and interest. Let's dive deep together into what NFR is all about.

China's Regulated NFT, Non-Fungible Rights (NFR)

What are Non-Fungible Tokens (NFTs)

NFTs are an evolution of cryptocurrency's relatively simple concept by making each token unique and irreplaceable. Modern finance systems are made up of sophisticated trading and loan systems for various asset types, such as real estate, lending contracts, and artwork. NFTs advance the reinvention of this infrastructure by enabling digital representations of physical assets.


How It Started

The ERC-721 standard was created by the same people who made the ERC-20 smart contract, and it sparked a new crypto market, NFTs trading. The contract defines the minimum interface - ownership details, security, and metadata and the ERC-1155 standard expands on the concept by lowering transaction and storage costs for NFTs and grouping multiple types of NFTs into a single contract.


NFT Creation Process

Anybody can create an NFT. All you need to do is select an NFT platform you want to sell on, create and connect your wallet, and create and list your NFT. This spawns numerous NFT scams due to the easy creation process, allowing anybody to steal another project's artworks and sell them to oblivious NFT collectors.


What are Non-Fungible Rights (NFRs)

Similar to NFTs, NFRs are unique and irreplaceable digital assets or representatives using Blockchain Technology. Much of the current market for NFTs is centered around collectibles, such as digital artwork, sports cards, and rarities. NFRs are digital assets that focus on representing tangible physical assets. For example, an virtual property has value because it represents a real house in real life.


NFR Creation Process

NFR has developed a model for digital certificates. It is mandatory for a third party to evaluate, test, and certify the product. After receiving the approval, it will be placed on the chain to conduct fair and open transactions in digital certificates, focusing on returning to physical assets.


NFR Regulating the NFT Space

NFR solves the legal problems of digital transactions as its development conforms to Chinese laws and regulations, requires a third party evaluation, requires the Chinese Yuan to buy instead of cryptocurrencies, and uses the real name system. This prevents copycats, money laundering, corruption, and possible terrorism financing.


Will More Countries Follow China's Way of Regulating NFT?

The growing popularity of NFTs, as well as the ease with which they can be created and sold, is raising the number of NFT scams, account takeovers, and money laundering. Governments worldwide have started drawing up laws dealing with NFTs to prevent money laundering and protect consumers. Regulations might come at a cost, such as identifying yourself on the Blockchain and a move towards centralization.