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Arts & Communication Blockchain and royalties in China’s art market

on Preventing the Risks of Bitcoin” (No. 289 [2013] of the currency-related domains, such as digital art collections,
People’s Bank of China) allowed public trading of virtual which are unlike cryptocurrencies.
currencies but warned of the risks. This permissive stance After outlining China’s general approach toward
changed in 2017 with the “Announcement on Preventing blockchain and digital collectibles, it is illustrative to
the Financing Risks of Initial Coin Offerings” by the reference the Hic et Nunc platform. Despite its global
People’s Bank of China and others, which made token operation cessation, Hic et Nunc garnered significant
fundraising and initial coin offerings illegal. In 2018, attention from Chinese artists, partly due to its lower
the “Notice of Risk Warning Against Illegal Fundraising environmental impact and emphasis on a community-
in the Name of “Virtual Currency” and “Blockchain” centric model. This preference reflects the unique
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further tightened regulations by deeming the issuance of intersection of cultural values and technological adoption
digital assets for fundraising as illegal. Then, in 2020, the in China, demonstrating the potential for blockchain
“Opinions of the Supreme People’s Court and the National platforms that align with environmental concerns and
Development and Reform Commission on Providing foster communal engagement among artists. The platform’s
Judicial Services and Guarantees for the Socialist Market approach offers a model for balancing innovation with
Economy System” recognized the importance of digital cultural and regulatory expectations within the Chinese
assets and online virtual property rights within the market market.
economy framework. Finally, in 2021, the “Notice on China takes a nuanced approach to blockchain and the
Further Preventing and Resolving the Risks of Virtual digital arts, clearly separating cryptocurrency trading from
Currency Trading and Speculation” (No. 237 of the People’s
Bank of China) clearly categorized cryptocurrency-related real-life blockchain technology applications. The country
business activities as illegal financial activities, reinforcing exemplifies innovation in combining traditional heritage
with modern digital methods. China is leading the way
the government’s strict stance on speculative risks and in innovation by integrating cutting-edge digital methods
aligning blockchain technology with the country’s with traditional legacy through its embrace of blockchain
economic system.
technology in cultural spheres. This two-pronged method
China’s blockchain landscape is characterized by a is clearly demonstrated by the “Digital Dunhuang Open
diverse array of platforms, encompassing both private and Material Repository,” a groundbreaking project that
public chains. Major tech conglomerates have adopted uses blockchain to digitize and protect the art treasures
semi-private blockchain, while others have embraced of Dunhuang’s Mogao Grottoes. In contrast to most
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consortium chains or Blockchain-as-a-Service models, digital archives, this repository protects the provenance
common in the Chinese market. Public chains are and copyright integrity of important cultural objects
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also utilized, though their use is tempered by China’s while still allowing legal and shared access to them in
regulatory stance on cryptocurrencies. These platforms digital form. These digital collectibles, with their inherent
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often do not allow secondary market trading, in line with artistic and cultural value, are allowed and thrive in a more
China’s cautious stance on digital asset speculation, which regulated environment, using fiat currencies rather than
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minimizes financial speculation and avoids the volatility cryptocurrencies for transactions. Using blockchain’s
associated with cryptocurrency markets. 128 immutable ledger, the project ensures that the authenticity
and ownership of each piece can be verified, suiting
The emergence of NFTs in China’s digital art sector both academic study and public participation without
showcases the country’s nuanced approach to blockchain. compromising legal or security standards.
China distinguishes sharply between cryptocurrency
trading and blockchain applications like NFTs. The Significantly, the initiative aligns with China’s broader
Chinese NFT market, while avoiding the term “NFT” due policy of integrating “Culture+Technology.” In June 2021,
to its associations with cryptocurrencies, has seen the rise the Dunhuang Academy partnered with Alipay’s AntChain
of digital collectibles platforms. These platforms, such to release China’s first NFT payment code skin, marking
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as Alibaba’s Topnod and Tencent’s Huanhe, focus on the a historic moment in the fusion of cultural heritage with
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primary market, issuing digital collectibles tied to art, digital technology. This partnership has evolved to
historical relics, and cultural products, operates on a introduce the first Dunhuang-themed digital collectible on
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non-cryptocurrency transaction model. This dichotomy Topond, dynamically presenting the immortal art treasures
highlights China’s approach to differentiating and of Dunhuang and carving a new path to art appreciation
regulating the burgeoning digital economy. The focus through digital technology.
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remains on leveraging blockchain’s potential for secure, The selection of Dunhuang for this venture is strategic,
transparent transactions and its applications in non- reflecting its rich cultural core and burgeoning popularity

Volume 3 Issue 1 (2025) 16 doi: 10.36922/ac.2875