Photo: The torch non-fungible token (NFT) issued by 2022 Asian Games in Hangzhou

The torch non-fungible token (NFT) issued by 2022 Asian Games in Hangzhou - one of the first blockchain-based digital assets that was distributed by an official organization, were sold out within a second after being made available at Alipay's platform at 12 pm Thursday, underscoring the rapidly-rising market for NFT in China, despite lingering issues regarding oversight and compliance.

The 20,000 NFTs featuring the event's 3D digital torch marks the first NFT collection the organizer of the Asian Games issued in the 70-year history of the sports games. They were priced at 39 yuan($6.05) each, and were sold via Alipay, technologically supported by Ant Group's self-developed blockchain, AntChain.

According to an introduction on the sales page, the torch NFT collection will be permanently stored on the blockchain, and can neither be duplicated nor edited. An NFT is a digital asset that exists on blockchain. Unlike most digital items, which can be continually replicated, these are uniquely identifiable digital items that can be authenticated through blockchain. 

Industry observers said the issuance, which is the first-of-its-kind by a Chinese official organization, is of great significance, as it could reflect a more receptive attitude from regulators as long as the NFT trading does not involve illegal crypto trading.

"It could be seen as testing the waters, and the attitude of Chinese regulators depends on how companies address compliance issues," an industry insider told the Global Times on Thursday. He noted that if NFTs develop in a well-regulated environment, it may also support digital yuan payment in the future, as paying with a digital currency is the essence of digital trading. 

Chinese companies including Alibaba and Tencent this year have launched their individual NFT trading platforms, but all collections - except the torch NFT - were issued by artists rather than official partners.

"China has started relatively late in terms of NFT development, and the NFT issued by 2022 Asian Games represents a major move as it shows how the blockchain application could reshape sports and entertainment industries. Chinese sports fans will also be drawn in, further fueling the industry's growth," the insider said. 

The NBA Top Shot, a blockchain-based NFT marketplace that is jointly set up by the NBA and blockchain company Dapper Labs, has notched over $700 million in total sales in less than a year, according to media reports. 

But a major difference between NFTs sold in China and overseas is that the Chinese tokens are not tradable, and can only be purchased in Chinese currency rather than cryptocurrency. "This is clearly a line that could rein in speculation and illegal development," the insider said. 

The official Securities Times newspaper said in a harsh editorial piece last week that blind speculation has derailed the genuine value of NFTs, and the digital asset should serve as a bridge between the physical world and the blockchain.