China is preparing to take a new step toward embracing blockchain technology, according to media reports, as the government prepares to launch its first state-backed non-fungible token (NFT) marketplace.

The new NFT platform will launch in Beijing on January 1st of 2023, and it will be called the China Digital Asset Trading Platform. It will be a secondary market where users may trade digital copyrights, property rights, and collectibles.

The state-owned China Technology Exchange will run the exchange in collaboration with the government-backed Art Exhibitions China and a private company, Huban Digital Copyrights.

The underlying blockchain of the platform is called China Cultural Protection Chain, according to media reports.

Public blockchains are illegal in China, as the government mandates all internet systems have full verification of user identities, and allow regulators to step in at any time in the event of “illegal activities.”

China had been one of the first nations to embrace the NFT industry however, despite the government having been skeptical of crypto at the time. Beijing had banned all crypto transactions in 2021, instructing citizens to “stay away” from them. As a result, citizens have flocked to NFTs.

The Hangzhou Internet Court of China has ruled that NFTs are virtual property in the eyes of the law, because they have, “the object characteristics of property rights such as value, scarcity, controllability, and tradability.”