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China’s growing market for NFTs, metaverse could foster new money-laundering schemes, central bank official warns
- As virtual assets, NFTs and the metaverse could be used for money-laundering purposes, according to a People’s Bank of China official
- More than 50 jurisdictions across mainland China plan or have already moved to establish a regulatory framework for NFTs and the metaverse
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An official at China’s central bank cautions against the country’s rapidly growing interest in non-fungible tokens (NFTs) and metaverse-related activities, warning that these could “easily become money-laundering tools”.
Virtual assets “are decentralised, anonymous and without borders … [and] have been widely used in illegal transactions such as blackmail, drug trafficking, gambling, money-laundering, financing for terrorism, tax evasion and cross-border transfer of funds”, said Gou Wenjun, director of the Anti-Money Laundering Monitoring and Analysis Centre in the People’s Bank of China, at a financial forum held in Shanghai last week.
Gou’s speech, which was recently published by Caixin, The Paper and other Chinese media, predicted that obtaining digital assets like cryptocurrencies, NFTs and those found in the metaverse would evolve. “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 official said.
More than 50 jurisdictions across mainland China, according to Gou, plan or have already moved to establish a regulatory framework for these virtual assets, which includes setting up a licensing system that covers the owners and operators of these digital resources.
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SCMP Explains: What are NFTs?
SCMP Explains: What are NFTs?
While China has cracked down on the domestic mining and trading of cryptocurrencies like bitcoin, NFTs and the metaverse have been operating in a grey area.
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