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

in the market. By digitizing and dynamically representing effective implementation of resale royalties in the
Dunhuang’s art scenes, the “Dreaming of Dunhuang” digital space. The challenge remains in ensuring these
digital collectibles vividly reproduce classic artworks and amendments accommodate the unique nature of
iconic figures, showcasing the splendor of Dunhuang in NFTs and blockchain technology, enabling artists to
motion and making its cultural treasures more accessible receive resale royalties without infringing on existing
and relatable to a global audience. copyright laws. 139
Chinese NFT platforms are uniquely positioned in the (c) Addressing copyright infringement and resale
global landscape due to their focus on the primary market royalties: The landmark judgment in April 2022,
and the regulatory absence of a secondary market. which found an NFT platform liable for copyright
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Initiatives within the Shanghai Free Trade Zone and infringement, highlights the urgent need for NFT
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platforms like Topnod are indicative of China’s approach marketplaces to incorporate robust intellectual
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to melding digital innovation with cultural heritage. In this property review mechanisms. These mechanisms
ecosystem, platforms operate within stringent regulatory are pivotal not only for copyright compliance but
frameworks that clearly separate digital currencies from also for verifying the authenticity and ownership of
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digital art collections. This separation is critical, as it digital works, ensuring artists rightfully receive
curtails financial speculation in transactions involving their resale royalties. Implementing such mechanisms
cultural assets, a factor significantly influencing the aligns with the global move toward recognizing and
liquidity and dynamics within the digital art market. enforcing resale royalties for artists, acknowledging
their continuing stake in the works’ circulation.
4.2. Strategies and recommendations for In the context of legal complexities surrounding
overcoming barriers in China blockchain in China, the Bigverse case serves as a
In the evolving landscape of China’s art market, the pivotal example. As the first NFT-related legal case
integration of blockchain technology offers a transformative adjudicated by the Hangzhou Internet Court, it tackled
approach to implementing resale royalties, a concept that several NFT-related issues in the absence of explicit
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has garnered increasing attention amidst the digital art legal provisions. This groundbreaking judgment
boom. This shift is marked by a delicate balance between addressed copyright infringement related to the
fostering innovation and ensuring compliance within a unauthorized use of the Fat Tiger Vaccination image
stringent regulatory framework, especially concerning in NFT form, setting a precedent for how intellectual
NFTs. property-related disputes involving NFTs might be
approached in China. The court’s exploration of the
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4.2.1. Legal barriers nature of NFT transactions, the originality of disputed
The legal barriers to integrating blockchain technology in works, and the responsibilities of NFT platforms
the Chinese art sphere are outlined as follows: provide critical insights into navigating China’s
(a) Legal complexities in NFT regulation and resale evolving legal landscape for blockchain technology
royalties: The adaptation of China’s legal framework and digital art.
to blockchain and NFTs is a testament to the country’s (d) Regulatory and legal framework adjustments for
recognition of digital innovation’s potential. The blockchain and resale royalties: The rapid digitization
Cybersecurity Administration of China has been of industries in China has surpassed the development of
instrumental in clarifying the regulatory stance on requisite legal and infrastructural frameworks needed
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NFT businesses, marking a significant development in for managing NFTs and enforcing resale royalties.
the legal landscape around blockchain technology in This gap underscores the potential for misusing NFTs
China. However, the broader regulatory resistance to and highlights the necessity for comprehensive legal
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cryptocurrencies underscores the need for a nuanced measures that address these risks while fostering a
approach to NFTs, which are typically classified healthy NFT market. Such measures should ensure
as artistic digital products. This classification that resale royalties are effectively implemented and
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strategically navigates the regulatory landscape, protected against the backdrop of digital innovation.
ensuring that NFTs used for implementing resale
royalties do not contravene financial regulations. 4.2.2. Cultural barriers
(b) Strengthening copyright protections through The cultural shift toward accepting blockchain as a viable
blockchain: Amendments to China’s copyright laws medium for art transactions and copyright enforcement is
signal the government’s resolve to bolster intellectual foundational. Collaborations with traditional artists and
property protections, a critical foundation for the cultural institutions play a crucial role in this transition,

Volume 3 Issue 1 (2025) 17 doi: 10.36922/ac.2875