December 23, 2023

China Embraces Web3 and Blockchain, Paving the Way for Decentralized Technology Advancements

In a seemingly contradictory move, China, while imposing a comprehensive ban on cryptocurrency activities, is vigorously championing the development of Web3 technology, promoting blockchain, NFTs, and decentralized applications (dApps).

China's governmental approach to cryptocurrencies and blockchain has presented a paradox, with a ban on crypto mining and trading coexisting with a more permissive stance towards other technologies such as NFTs. The latest shift in focus is evident as Chinese authorities, particularly the Ministry of Industry and Information Technology, lead a bold initiative to propel Web3 and blockchain technologies into the forefront.

A recently published document by the Chinese Ministry of Industry and Information Technology outlines recommended initiatives for the country's involvement in the Web3 space. The objectives include positioning China as a leader in decentralized technology by fostering a conducive policy framework and ensuring appropriate regulatory oversight to facilitate the harmonized growth of the Web3 industry.

The emphasis extends to advancing research in blockchain technology and other Web3 components, with a focus on nurturing domestic technologies while keeping pace with global innovations. Recognizing the international nature of Web3, the plan aims to actively engage in creating global standards for the industry, aligning with and influencing international norms to assert China's role in the global discourse on decentralized technology.

The initiative envisions the integration of Web3 technologies across diverse industries, including healthcare, education, and tourism. This signals a broad application spectrum of these technologies in China's digital infrastructure.

This latest development is part of a broader initiative by the Ministry of Industry and Information Technology to fully embrace decentralized tech. For example, a comprehensive 3-year action plan on the Metaverse, released in September, aims to incubate three to five metaverse startups of global significance by 2025.

China's assertive push into Web3 and blockchain technology stands in stark contrast to its strict stance on cryptocurrencies. Despite imposing a comprehensive ban on all cryptocurrency-related activities, including trading, Chinese citizens can still hold digital assets in Hong Kong. The initial crackdown on crypto mining was driven by China's commitment to reach carbon emission targets, as it previously held the largest share of global crypto mining due to low energy prices.

As the second-largest global economy and a major player in the tech space, China's initiatives in Web3 have the potential to significantly shape the industry despite the prevailing restrictions on cryptocurrencies.

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