Financial institutions in China have been told to stay away from non-fungible tokens (NFTs) after a new set of guidelines issued by industry associations emphasized curbing risks related to digital assets, reports the South China Morning Post. The advice is thought to be an attempt to pre-empt any government backlash given its cautious stance on the technology.
The use of NFTs in the issuance of financial assets such as securities, insurance, loans and precious metals will be prohibited, according to a statement jointly issued by the National Internet Finance Association of China, China Banking Association and the Securities Association of China on Wednesday.
Financial institutions have also been urged not to illegally facilitate the trading of NFTs or illegally establish a trading platform, according to the statement from the government-managed industry associations. The guidelines come as companies wait for a clearer picture from regulators on blockchain-backed digital assets, which are becoming increasingly popular in China.