Daily Management Review

Distinction Between NFTs And Cryptocurrencies Highlighted By China's Ant Group


Distinction Between NFTs And Cryptocurrencies Highlighted By China's Ant Group
A distinction between non-fungible tokens (NFTs) available on its platforms and cryptocurrencies was sought to be drawn by China's Ant Group amidst a crackdown on cryptocurrencies by Chinese authorities following confusion over the latest regulatory directions and advice over trading in cryptocurrencies offered by Beijing.
Two NFT-backed app images via its payment platform Alipay were put up for sale by Ant, the fintech group controlled by Jack Ma. Those images were sold out pretty fast as on Wednesday.
There was confusion over social media about Ant's adoption of non-fungible tokens where they were linked to virtual currencies such as bitcoin as those also have the same underlying technology.
"Alipay selling NFT products. Isn't that illegal transaction?" one comment posted on Twitter-like Weibo said.
Non-fungible tokens and cryptocurrencies were two different things, said Ant on Wednesday. The company is currently going through a restructuring process as ordered by the government following the collapse of its mega-IPO late last year.
This year there has been a surge in the popularity of NFTs as NFT artworks were sold for millions of dollars.
"NFT is not interchangeable, nor divisible, making it different by nature from cryptocurrencies such as bitcoin," said a spokesperson at AntChain, the Ant unit that develops blockchain-based technology solutions.
A unique signature for digital assets is created with the help of NFTs, he said. 
The confusion over the nature of NFTs was also highlighted by Winston Ma, NYU Law School adjunct professor.
"Are NFTs virtual currencies? Or, are NFTs certificates for virtual currencies? And more importantly, are NFTs securities? These are the questions that no major digital economy's legislature has ever answered," Ma said.
Alibaba's platform also auctions NFT digital artworks, in addition to app images, that can be accessed by Ant's Alipay app. Blockchain technologies to NFT products is provided by it, AntChain said in product agreements.
Storage space designated by AntChain hold the copied versions of the artworks and those copies are marked with distinct, blockchain-based certificates that identify ownership of the digital assets.
Over the past one month or so, there has been intensification of the crackdown on cryptocurrency trading and mining by Chinese authorities and regulators which are part of Beijing’s efforts to reduce the financial risks that these cryptocurrencies present to the conventional and traditional financial system of the country.