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

implies that any system for implementing resale royalties regulated environment that bans digital currencies yet
would need to be carefully designed to align with existing encourages blockchain applications. On the flip side, the
financial and digital asset regulations. challenges in China primarily revolve around regulatory
and market readiness. The absence of a secondary
5. Conclusions and future directions market for digital collectibles limits the scope for resale
5.1. Conclusion and key takeaways royalties. In addition, China’s cautious stance on digital
assets, while minimizing financial speculation, could also
Global resale royalty development is one of the key restrict the fluidity and dynamism of a potential resale
takeaways of this paper. The journey toward implementing royalties market. The integration of such a system would
resale royalties demonstrates a diverse global landscape. require careful navigation of China’s unique digital and
While the EU has established a harmonized approach, the financial landscape, balancing innovation with regulatory
US continues to grapple with legal hurdles. In contrast, compliance.
China’s art market is evolving with unique characteristics,
highlighting the absence of a resale royalty scheme but a 5.2. Recommendations
growing interest in blockchain applications within the art Developing and harmonizing legal frameworks for resale
domain. royalties across borders is essential for global policymakers.
The necessity of resale royalties is underscored by This approach should consider the distinct dynamics of
their diverse impacts across different countries. In the each art market and foster international cooperation to
EU, artists enjoy financial security and encouragement for effectively manage the complexities of global art trade and
creative output, while in the US, the lack of a nationwide digital assets. Innovation in blockchain solutions tailored
system often results in artists missing out on financial gains to the art market’s specific needs is a crucial task for
from their work’s appreciation. The Australian experience technology developers. These innovations should prioritize
shows significant support for Indigenous artists, yet it transparency, security, and user-friendliness, particularly
also brings challenges, such as administrative burdens for artists and buyers, while simplifying the tracking and
and potential influences on initial sale prices. In China, distribution of royalties to broaden accessibility.
the potential introduction of resale royalties, especially in Artists and creators are encouraged to actively engage
the digital realm, could be financially beneficial for artists, with blockchain platforms and educate themselves about
but regulatory challenges and the absence of a secondary digital rights and royalties. Advocating for equitable
market for digital collectibles present hurdles. practices and policies is vital to protecting their economic
Blockchain technology’s role in implementing rights in both the traditional and digital art spheres. Art
resale royalties is revolutionary, offering transparency, markets and galleries are advised to integrate technology
security, and efficiency. This is exemplified by platforms that facilitates fair trade practices, including the use of
like OpenSea, where smart contracts in NFTs ensure blockchain for transparent and efficient management of
automatic royalty payments. The impact of blockchain art sales and royalties. A balanced ecosystem supporting
in implementing resale royalties is multifaceted. For both artists and collectors is key to the advancement
artists, it brings the promise of ongoing revenue and of the art market. Art collectors and investors should
recognition, as the resale of their work continually benefits stay informed about the effects of blockchain and resale
them financially. However, high royalty rates might deter royalties on art valuation and market dynamics. Ethical
potential buyers, affecting the initial sale price and market and financial considerations in supporting artists through
liquidity. Buyers benefit from transparent transactions but resale royalties are crucial for informed decision-making
face the complexities of blockchain technology and market in art collection and investment.
volatility. For platforms, while blockchain enables efficient China’s exploration of a regulated secondary market for
royalty processing and attracts users through transparency, digital collectibles could invigorate the market and ensure
adapting to the evolving blockchain landscape and the protection of artists’ rights and royalties. Implementing
managing off-chain transactions remain significant a blockchain-based resale royalty system that aligns with
challenges. China’s unique digital and financial regulatory landscape
China’s approach to blockchain emphasizes its could provide a model for other countries in similar
application across various economic sectors, diverging situations. Academic and research institutions have a
from other countries’ focus on financial applications. This vital role in studying the evolving relationship between
broad vision is reflected in the development of digital blockchain technology and the art market. Focus areas
collectibles, a unique iteration of NFTs thriving within a should include the long-term sustainability of the market,

Volume 3 Issue 1 (2025) 19 doi: 10.36922/ac.2875