In a strange turn of events, China, one of the countries with the strongest anti crypto rules, has announced it will boost non-fungible tokens (NFTs) and decentralized applications.
This is part of China’s strategy to embrace blockchain technology, the technology upon which crypto is based, even though its ban on crypto remains intact.
In a document released by the Ministry of Industry and Information Technology on Tuesday, it plans to formulate strategy documents to clarify the development path of web3.
“The emphasis will be on key areas such as governance and industry, with encouragement for the exploration of new business models like NFTs and decentralized applications, expediting innovative applications and the construction of a digital ecosystem for Web 3.0,” the central government said in the document, set to address inquiries from Johnny Ng, a member of the CPPCC National Committee, the country’s top political advisory body.
China has led in the adoption of blockchain, even though the government has practically banned the trading of cryptocurrencies. It is one of the countries at the most advanced stage in the development of a central bank digital currency (CBDC).
The country’s CBDC development has gone through several stages and is currently being tested for cross-border payments.
Another area where China has explored is the area of identity management. Going forward, Chinese citizens would have digital identity documents such as drivers licenses on the blockchain, which can be accessed in any part of the world to verify their identities.
China added that the ministry added that it plans to launch pilots related to distributed digital identity to explore web3 digital identity authentication and management.
Also earlier this month, state-backed Blockchain-based Service Network China launched a national-level real-name decentralized identifier system in support of the country’s Ministry of Public Security research institute.
Commenting on this, BSN, the developer of China’s national blockchain infrastructure said “China RealDID is viewed as an extension of Anicert’s Cyber Trusted Identity,” adding that the system launch is a “bold step in personal data protection.”
“Despite its ban on cryptocurrencies, China’s progress in blockchain technology is noteworthy, particularly in pioneering the Real-Name Decentralized Identifier to the Web3 domain,” it added.
China Bows to Pressure
China has been resolute about preventing the use of cryptocurrencies and associated technologies. Over the years, several new aspects of blockchain technology have come, one of which is metaverse.
Recently, local governments in China have pledged to develop the metaverse industry, one of which is Sichuan — a southwestern Chinese province that was once a crypto mining hub prior to the country’s mining ban.
The province in August pledged to grow its metaverse industry to reach a market size of 250 billion yuan ($35.1 billion) by 2025. This has pressured the Chinese central governments to accommodate the growth of these technologies, hence encouragement towards web3 development.
Wider Crypto Adoption
Cryptocurrencies have faced much resistance from many governments around the world, but as time goes on, the barriers are getting broken. The decision by China to support NFT and decentralized applications only suggests that eventually, the resistance can be broken.
This also suggests that wider crypto adoption is only a matter of time, as cryptocurrencies cannot be separated from NFT and decentralized applications. Hopefully more countries will open their doors to crypto this way.