In a surprising development, China has signaled a shift in its stance on cryptocurrency and digital assets by announcing a groundbreaking Web3 strategy. This strategy embraces the development of Non-Fungible Tokens (NFTs) and decentralized applications (dApps), marking a departure from previous criticisms of cryptocurrencies. The move aims to foster innovation, security, and government accountability, focusing on key sectors such as government and industry.
The strategy, outlined in response to a proposal advocating for the growth of the Web3 industry by Wu Jiezhuang, is a collaboration between the Ministry of Science and Technology, the Chinese Academy of Sciences, and the China Association for Science and Technology. It challenges the existing ban on digital assets in China by emphasizing the promotion of new business models, particularly in the areas of NFTs and dApps.
Despite regulatory restrictions, the Chinese government acknowledges the growing interest in NFTs among its citizens and commits to developing the Web3 industry and nurturing a robust digital ecosystem. This commitment is part of a broader embrace of technological innovation and forward-looking approaches to digital identity and governance.
A key aspect of the strategy involves initiating pilot applications for distributed digital identity (DID), positioning China as a pioneer in exploring Web3 digital identity verification and management. This aligns with local governments’ promises to develop the metaverse industry and signals a wider commitment to technological innovation. The Ministry of Industry and Information Technology (MIIT) is planning pilot projects for distributed digital identity, focusing on digital identity verification for the public.
In a notable development, a People’s Court in China published a comprehensive report in September analyzing the legal aspects of crypto assets, reshaping the country’s stance on cryptocurrencies. Collaboration between the National Standardization Committee and the Ministry led to the establishment of the National Blockchain and Distributed Ledger Technology Standardization Technical Committee, fostering an environment conducive to the development of Blockchain-based Web3. Research institutions in China continue to actively explore Web3-related technologies, emphasizing the transformative potential of decentralized technologies even within a traditionally cautious regulatory environment.