China Unveils Plan to Boost NFTs, Web3 Ecosystem

In a letter to the Chinese People’s Political Consultative Conference (CPPCC), the Ministry of Industry and Information Technology revealed plans to boost the presence of non-fungible tokens (NFTs), decentralized applications (dApps), and Web3 in the communist nation.

The letter makes specific mention of focusing “on key areas such as government affairs and industry, [encouraging] the development of new business models such as NFT and distributed applications…and [accelerating] the innovative application of [Web3] and the construction of a digital ecosystem.”

The steps by which China plans to do this are: (1) Improve top-level design, including the formation of a Web3 strategy document; (2) strengthen technical research and supervision, such as by supporting universities that wish to research Web3 more; (3) carry out international exchanges and cooperation, specifically with Web3 global standardization activities; and (4) increase technology publicity and promotion.

In addition, the letter mentions supporting “enterprises, universities, and research institutions to carry out research on the [Web3] technology system and achieve breakthroughs in key core technologies in cross-chain, privacy computing, smart contracts, etc.” This language reveals that China is diving deeper into Web3 tech than previous documents have indicated.

The letter contains mostly the broad strokes of a strategy rather than specifics, but it is telling that the country is considering the promise of Web3 technology, even as it continues its crypto transactions ban which started in September 2021. Despite the ban, NFT ownership and trading has been allowed, with the government itself launching a secondary trading marketplace in January of this year.

China’s Web3 Stance Shows Bullishness on the New Tech

China has had a volatile policy history with cryptocurrency, banning the trading and mining of such coins multiple times in the past decade. But it hasn’t shown the same vehemence for NFTs and blockchain technology, often stating that it has a place within Chinese society, though the ways it might implement the tech could raise some eyebrows.

Here are three stories in the past four months involving the communist nation and Web3.

First, about a month ago, China released a statement saying that anyone caught stealing NFTs or other digital assets could be punished by law. The statement classified NFTs as digital property or data, with three crimes outlined so that offenders could be prosecuted with two criminal charges.

Next, three months ago, China approved a “slew” of NFT and virtual-world trademark applications, including downloadable digital files authenticated by NFTs and trademarks that would display virtual goods for retail purposes. The move signaled a bullish affirmation of the country’s stance towards NFTs and the metaverse.

Lastly, four months ago, a Politico report shared that China was planning to bring its “social credit score” to the metaverse. The score, which measures the “trustworthiness” of individuals, would be applied to metaverse users, who would be tracked and possibly punished for sharing rumors that would damage the nation.

So, while China has expressed a bullishness about Web3 tech, some of its implementations of that technology might raise some concern. Still, many proponents would say some Web3 is better than none, especially given the principles underpinning the space.