China Social Credit System May Extend to the Metaverse

Watch out Web3! China is planning to bring its controversially social credit system into the metaverse. According to a new report from Politico, the state-owned telecommunication firm China Mobile is proposing a “Digital Identity System” for all users of online virtual worlds in the country.

The social credit score system, which China has been gradually been implementing since 2014, uses a variety of metrics to assess citizen’s “trustworthiness.” Now it looks like China’s will bring the program into the metaverse, where it can be used to track and potentially punish users who “spread rumors and make chaos” in virtual worlds.

The move would link a person’s “social” and “natural” characteristics — ranging from personal information such as facial features, birthdate, occupation, and name — to a digital ID that will permanently store information and could be used by law enforcement to maintain order in the metaverse.

Despite China’s early resistance to crypto, a recent report from Coincub shows that in 2023, the country is leading all nations with 90% of all blockchain patents worldwide. The CEO of Coincub, Sergiu Hamza, said that China is likely to integrate “social aspects into blockchains” to try to use Web3 tech to benefit the “social good” of its citizens.

The new proposal was put forward at an International Telecommunication Union (the UN’s Telecom Agency) meeting. According to Hamza, China aims to get ahead of the game on nascent technologies so that one day they can offer the new program “as a service when the West starts demanding it.”

Of course, many people look at China’s social credit score as a dystopian, authoritarian over-reach by the government. Moving it into the metaverse will enable the government to ban citizens from certain goods and services if their behavior is flagged as inappropriate, only strengthening the Chinese Communist Party’s stranglehold on power.

Though not specifically mentioned in the meeting, the development could also strengthen China’s digital yuan, or the Central Bank Digital Currency (CBDC) — which kicked off with a pilot program in 2020.

China Isn’t the Only Country Making Moves in Web3

China’s goal of implementing a social credit score in the metaverse isn’t exactly a win for Web3, since it shows that nascent technologies can be used to empower not just the individual, but also the State. However, many other countries are embracing Web3 with the hopes of implementing more decentralized and democratic initiatives. Here are some of the top stories from Rarity Sniper.

First, about two weeks ago, Singapore’s central bank and financial regulatory authority, the Monetary Authority of Singapore (MAS,) created a new fund that pledges $111 million over the next three years to foster growth and innovation through nascent technologies. It comes with an open call for builders in Web3 to demonstrate use-cases for new technologies.

Next, four months ago, Romania’s National Institute for Research and Development in Informatics announced an NFT trading platform. The new marketplace aims to drive Web3 adoption in the country, and serve as a link between public and private sector users and institutions.

Finally, in January 2023, Indonesia announced its plan to launch a national cryptocurrency exchange sometime in 2023. The country, which is comprised of over 17,000 islands and 275 million people, is home to an ever-increasingly literate crypto and Web3 population.

The move from China to integrate its troubling social credit system into the metaverse is unsurprising, given the country’s authoritarian stance on just about everything. But perhaps the move will inspire democratic countries around the world to also step up their game in Web3, and use these nascent technologies for the good of the people, as many countries are already doing.