China NFT Weekly: The Neutrality of Crypto

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

This week: ByteDance-owned VR startup Pico strengthens ties with U.S. chipmaker Qualcomm, China to expand testing of e-CNY, Tencent delves deeper into metaverse despite government warnings, Binance says it will not block all Russian accounts, and more.

ByteDance-Owned VR Startup Pico Strengthens Ties with U.S. Semiconductor Maker Qualcomm

Pico, the Chinese virtual reality (VR) startup bought by TikTok parent company ByteDance in August 2021, has struck a partnership with U.S. semiconductor giant Qualcomm to push further into the extended reality (XR) space.

• Pico’s XR products will be powered by Qualcomm’s Snapdragon Spaces, the chipmaking giant’s developer program designed to make apps more ready for XR.
• The goal of Snapdragon Spaces developers is not to immerse users in a virtual space. Instead, their goal is to build experiences for augmented reality (AR) glasses and make them accessible through existing smartphones.
• Despite being a leading VR brand in China, Pico is nowhere close to the scale of Oculus’s user reach or creator ecosystem. Pico’s two major products claimed a total of just about 0.3% of the global VR headset usage in January, according to Steam’s survey.
• The partnership is expected to help expand Pico’s content ecosystem and China’s XR market, which will see rapid growth given the country’s aggressive 5G rollout.
• The partnership is also expected to help ByteDance keep apace with other tech giants in metaverse-related developments, as both VR and AR are regarded as fundamental to building the metaverse. (TechCrunch, SCMP)

READ MORE: ByteDance Reportedly Buys Pico for 5 Billion Yuan

Tencent Delves Deeper Into Metaverse Despite Regulatory Warning

Tencent reportedly filed a patent for virtual concerts this week, despite the Chinese government’s crackdown on crypto and warnings from the People’s Bank of China (PBoC).

• Tencent‘s patent application follows the company’s success in hosting the country’s first virtual concert, “TMELAND,” on December 31, 2021.
• A report from Nasdaq claims that Tencent‘s immense success in the virtual space allows the company to ignore regulatory uncertainties in developing the metaverse. Looking to diversify away from China, Tencent Music acquired a stake in Wave, an LA-based virtual concert platfrom in late 2020.
• In December 2021, the PBoC clamped down on NFTs and the metaverse using anti-money laundering (AML) tools. The PBoC’s AML unit sees virtual assets as a pathway for illegal activities facilitated by the isolated nature of NFTs and metaverse-based items.
• Despite harsh regulations, the metaverse industry is still booming. By mid-February this year, a reported 16,000 trademark metaverse-related applications were pending approval in China. (Nasdaq)

China to Widen Testing of e-CNY as Russian Invasion Spotlights Crypto’s Potential Role

China is close to approving trials of the central bank digital currency in a number of cities and regions. Meanwhile, China’s share in Bitcoin and other major crypto currencies decline as Russia escalates its attack on Ukraine.

• China “will soon approve a third batch of localities set to launch trials of its digital yuan currency,” according to Reuters and Chinese state-backed financial outlet Securities Times. The reports say that “a number of cities and regions have applied to authorities for permission to test the digital yuan,” including the cities of Guangzhou, Chongqing, Fuzhou and Xiamen.
• Meanwhile, according to the South China Morning Post, mounting economic sanctions against Russia, including the exclusion of the country from the SWIFT financial messaging system, could offer new opportunities for China to develop its digital RMB and the Cross-Border Interbank Payment System (CIPS), which was created to boost international use of China’s currency in trade settlements.
• A note by the Financial Stability Bureau of the PBoC revealed that China’s share in Bitcoin transactions has declined by 80%, falling from a proportion of more than 90% to 10%, following the government’s crypto crackdown. (CoinDesk)

Binance Says It Will Not Block All Russian Accounts Despite Ukraine’s Request

The world’s largest crypto exchange said on Monday that it will block the accounts of Russian individuals who have been sanctioned, but will not “unilaterally” freeze the accounts of all Russian users, according to CNBC.

• The comments come after Ukraine’s Vice Prime Minister Mykhailo Fedorov called on major cryptocurrency exchanges to block all Russian and Belarusian user accounts.
• “Crypto is meant to provide greater financial freedom for people across the globe. To unilaterally decide to ban people’s access to their crypto would fly in the face of the reason why crypto exists,” according to a spokesperson for Binance.
• The U.S. and European Union have responded with sanctions targeting Russian banks and sovereign debt. The Russian ruble has plunged as a result.
• Binance said it is “taking the steps necessary to ensure” that actions are taken against those who have had sanctions levied against them, “while minimizing impact on innocent users.” Binance added that “should the international community widen those sanctions further, we will apply those aggressively as well.”
• Several other crypto exchanges, including KuCoin and Kraken, took a similar stance of neutrality, refusing to freeze the accounts of ordinary Russian users without a legal requirement to do so. (CNBC)

Ukraine Received Crypto Donations of Over $54 Million Amid War Against Russia

Donations in cryptocurrencies are pouring into Ukraine as the war with Russia enters its second week.

• Since Moscow commenced the invasion on February 24, more than 102,000 cryptoasset donations, totaling $54.7 million, have gone to the Ukrainian government and Come Back Alive, an NGO providing support to the military, according to new data from blockchain analytics firm Elliptic.
• On February 26, a Twitter account belonging to the Ukrainian government began to solicit cryptoasset donations. The move came after the country’s central bank cracked down on digital money transfers with a nationwide declaration of martial law. Up until then, all donations had to travel via traditional payment channels.
• Donations of NFTs have also surged, according to CNBC. A CryptoPunk NFT worth over $200,000 was sent to the Ukrainian government’s ethereum account. In addition, Elliptic says that a single transaction worth $1.86 million looks to have come from the sale of NFTs originally intended to raise funds for Wikileaks founder Julian Assange.
• Ukraine also announced Wednesday that it would reward those who have helped fund the country’s war against the Russian invasion through a promotional “airdrop,” distributing crypto tokens directly into user wallets. The announcement prompted a series of micro-donations, with 95% of donors contributing 0.001 ETH or 0.01 ETH with the expectation of getting a free token back.
• However, the “airdrop” was canceled on March 3, after an unknown entity released a Peaceful World token with the symbol WORLD, in an obvious attempt to spoof the promised token. (CNBC, Fortune, Protocol)

‘Fortnite’ Maker Epic Games Buys Online Record Store Bandcamp in Bid to Win Music Metaverse

Video game developer Epic Games announced that it has bought Bandcamp, an online music store and community geared towards independent musicians.

• Specific terms of the deal were not disclosed. According to Epic Games, “Bandcamp will play an important role in Epic’s vision to build out a creator marketplace ecosystem for content, technology, games, art, music and more.”
• Thanks to the success of Fortnite, Epic has acquired a number of companies over the past few years. According to Protocol, this might suggest that the games company is planning to build a small metaverse empire “at the intersection of entertainment, technology and social media, including social video app Houseparty and Guitar Hero and Rock Band developer Harmonix.”
• Under Epic’s ownership, Bandcamp will continue to operate as a standalone marketplace and music community, and it will continue to be led by CEO and co-founder Ethan Diamond.
  • “We will continue to build Bandcamp around our artists-first revenue model (where artists net an average of 82% of every sale),” Diamond wrote. “We share a vision of building the most open, artist-friendly ecosystem in the world, and together we’ll be able to create even more opportunities for artists to be compensated fairly for their work.”
• Oakland, California-based Bandcamp was founded in 2008. It claims to have paid nearly $1 billion to artists and labels to date. (Protocol, Variety)

The World’s Longest-Living Lobster: George

• The oldest lobster was an Atlantic lobster named George. He was caught off the coast of Newfoundland, Canada, in 2008, and was estimated to be around 140 years old at the time.
• George was able to escape dinner-table fate. A New York seafood restaurant granted him his freedom and released him into the Atlantic Ocean in January 2009.
• Also, it’s a common myth that lobsters can live forever. Scientists found that, on average, male European lobsters live to 31 years old, and females to 54.
• Like many other decapod (ten-footed) crustaceans, lobsters continue to grow throughout their lives. Young lobsters grow and moult rapidly. As they age, however, increasing amounts of energy is needed, and eventually the cost is too high, and lobsters can die, effectively from exhaustion.

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]. Hope you all are doing great, and see you again next week!