China NFT Weekly: Secondary Market for Digital Collectibles

Digestible news on the latest developments across the fields of NFTs, blockchain and metaverse in China, compiled for you every week by Pandaily.

This week: Chinese metaverse infrastructure startup Xmov receives $130 million in funding, Shandong Television pursues NFT and metaverse projects, Hong Kong fencing-themed NFT project partners with local Bored Ape collectors, and more.

Chinese Metaverse Infrastructure Startup Xmov Receives $130 Million in New Funds

Xmov, a metaverse infrastructure startup, announced today its completion of Series B and Series C financing totaling $130 million, according to reports by Pandaily and DealStreatAsia, citing the company’s official press release.

• The company’s $20 million Series B round was co-led by Fresh Capital and Jinsha Capital, with participation from Sequoia Capital China and 5Y Capital. Both Sequoia and 5Y have been investing in Xmov since 2018.
• Xmov’s $110 Series C was led by SoftBank’s Vision Fund and an unnamed strategic investor, with additional participation from Northern Light Venture Capital and Index Ventures. Index Capital served as the financial advisor for the deal.
• The proceeds will be used primarily for product R&D, according to Dr. Jinxiang Chai, founder and CEO of Xmov and Carnegie Mellon University alum.
• “The next generation of internet platforms will be mainly in the form of 3D interface, in which virtual human as an information carrier, will have a great contribution,” according Feng Deng, Managing Partner at Northern Light Venture Capital.
• Founded in 2018, the computer vision and computer graphics company developed virtual avatars for brands including Tencent, Alibaba, Xiaomi, and L’Oréal. (Pandaily, DealStreetAsia)

Guosheng Securities: China Likely to See Establishment of Secondary Market for Digital Collectibles

With the desecuritization of NFTs and the renaming of the assets as “digital collectibles,” China is well on its way to standardize the NFT industry and rules for the proper use, issuance, sales and circulation of the digital assets, according to Wallstreetcn, citing a report by brokerage firm Guosheng Securities.

• On December 24, 2021, state media Xinhua News Agency issued a set of “news digital collectibles” – 110,001 copies of selected news photos – via its mobile app for free. The move indicates official interest in digital assets and recognition of the value of their underlying blockchain technology.
• Local cultural equity exchanges are expected to serve as centralized marketplaces for the trading of digital collectibles, providing auction and financing-related services to enterprise clients, according to the Guofeng Securities report.
• Enterprises can buy and sell cultural assets, digital art collectibles, IP derivatives, and more in these centralized marketplaces.
• China will also see the development of standardized primary and secondary markets for NFTs, claims Guosehng Securities, citing public information. (Wallstreetcn – source in Chinese)

China’s Shandong Television Pursues NFT and Metaverse Projects

According to a report by SCMP, the broadcaster of China’s eastern Shandong province has started developing a marketplace for NFTs, or “digital collectibles” as they are called in China, becoming the latest government-owned media entity to make its foray into the metaverse industry, following Xinhua News Agency last December.

• Broadcaster Shandong Television also plans to build its own blockchain infrastructure to support digital collectibles, while developing “a series of metaverse products,” according to SCMP, citing an official statement by the provincial TV network.
• Shandong Television said its digital collectibles will revolve around the themes of cultural heritage, ancient architecture and natural scenery.
• The broadcaster’s move indicates official interest in NFTs and metaverse-related projects, despite regulatory uncertainties regarding the industry, Beijing’s crypto ban, and a previous warning by an official of the country’s central bank that these could “easily become money-laundering tools.”
• In one of the strongest signs that NFTs are here to stay in mainland China, an agency under the country’s Ministry of Industry and Information Technology (MIIT) last week announced plans to mint and sell a batch of digital collectibles this year to “spread China’s industrial culture,” and indicated interest in building an industrial service platform in the metaverse. (SCMP)

READ MORE: China’s State Media Xinhua Issues NFTs on Tencent’s Enterprise Blockchain

Hong Kong’s Fencing-Themed NFT Project Partners With Local Bored Ape Collectors

GOLD4HK, an NFT collection project based on Hong Kong Olympic fencing champion Cheung Ka-long and his men’s foil team, announced a partnership with Elite Apes, one of the city’s largest NFT collector clubs that own and manage assets from the renowned Bored Ape Yacht Club, according to a report by SCMP.

• Members of the Elite Apes club collectively own and manage Bored Ape Yacht Club NFTs worth 30,000 ETH (about $97.84 million).
• GOLD4HK said it would work “hand in hand to keep educating the Hong Kong market about NFTs,” while the partnership will also include a collaboration between their Olympic-themed fencing NFTs and Elite Ape’s Bored Ape commercial rights.
• Initial mockups include images of star foilist Cheung during last year’s Tokyo 2020 Olympic Games with a Bored Apes-themed face replacing his mask. The mockups are not for sale, but rather considered a commemoration of the partnership. However, organizers said they were planning official ape-athletes crossover artwork “later this year.”
• GOLD4HK postponed its drops multiple times, citing an influx in local NFT projects becoming ripe targets for hackers and phishing scams and other reasons.
• The Hong Kong Fencing Association (HKFA) distanced itself from the project in a “solemn declaration” last December. (SCMP)

Facebook Parent Company Meta Issues “Zuck Bucks” to Tap Financial Services and E-Commerce

Meta has drawn up plans to introduce virtual coins, tokens and lending services to its apps, as Facebook’s parent company pursues its finance ambitions, according to reports by the Financial Times and The Guardian.

• Meta CEO Mark Zuckerberg is looking to develop virtual coins – nicknamed “Zuck bucks” by staff – for users of Facebook and Instagram to reduce his platforms’ dependence on advertising in the future metaverse.
• The parent company of Facebook is seeking alternative revenue streams and new features that can attract and retain users, as popularity wavers for its main social networking products such as Facebook and Instagram.
• The virtual currency is unlikely to be a cryptocurrency based on the blockchain, according to people familiar with the matter. Instead, Meta is interested in developing centrally-controlled in-app tokens, similar the robux currency in the popular children’s gaming platform Roblox.
• According to the Guardian, products currently under development include “social tokens” or “reputation tokens,” which could be used to reward users. Meta is also looking at “creator coins,” which could be used by influencers on Instagram.
• Facebook’s financial arm, Meta Financial Technologies, led the initiative. In addition to developing the virtual tokens, Meta is also looking to tap the global NFT market, with plans to allow their integration into Instagram and Facebook. Meta has also been exploring more traditional financial services, with a focus on helping small businesses access affordable loans. (Financial Times, The Guardian)

HSBC Starts Metaverse Fund for High Net Worth Clients in Asia

HSBC, one of the world’s largest banking and financial services institutions, is starting a fund in the metaverse for private banking clients in Asia, according to reports by CoinDesk and Fortune. The financial services provider joins a growing list of major banks to jump on the metaverse bandwagon, hoping to capitalize on the industry’s growth potential.

• Dubbed the Metaverse Discretionary Strategy portfolio, the fund targets Singapore and Hong Kong’s super wealthy, and is managed by HSBC Asset Management.
  • The actively-managed fund will focus on five key areas: metaverse infrastructure, computing, virtualization, experience and discovery, and human interface, according to the bank.
• HSBC hopes to capture opportunities presented by the global development of the metaverse ecosystem over the next decade, the bank said in a statement, adding that the “metaverse is expected to become the next iteration of the internet.”
• This is HSBC’s most substantial incursion into the metaverse realm so far, following its acquisition of a plot of land in the Sandbox metaverse to engage with sports, e-sports and gaming fans. (CoinDesk, Fortune)

READ MORE: HSBC Joins Metaverse Race Through Partnership With The Sandbox

That’s it for this week’s newsletter – thanks for reading! As always, I welcome any feedback on how to make this newsletter better. My email is [email protected]m. See you again next week!