China Embraces Web3, but Digital Yuan Raises Concerns

China’s drive supports Web3 objectives but consolidates state power; despite the momentum of tech giants and developers, concerns remain regarding the digital yuan.

In a written response to the proposal by the National Committee of the Chinese People’s Political Consultative Conference (CPPCC), Yin Hejun, the Minister of Science and Technology of China, declared that the Chinese government places significant emphasis on advancing the Web3 sector.

The document recognizes China’s strong industrial base and vast potential for Web3 development, which includes policy assistance, technical investigation, and practical implementations.

He stated:

“The proposals on strengthening resource support for Web3 technology research and development, strengthening technology supervision and management, encouraging international cooperation, and strengthening publicity and promotion are forward-looking and strategic and highly compatible with the key work of the Ministry.”

The document references authoritative protocols regarding blockchain technology and blockchain innovation initiatives that investigate a range of applications, including intellectual property and trade finance.

Prominent Chinese technology firms, including Ant Group, Baidu, and Huawei, exemplify the consortium’s indispensable function within this industry.

Furthermore, over 50,000 developers are reportedly involved with the state-supported blockchain Chang’an Chain, as reported by China.

Other government agencies, including the Ministry of Science and Technology, have implemented policies and standards to hasten blockchain implementation.

Additionally, local initiatives in Beijing and Shanghai seek to foster Web3 innovation. Organizations are capitalizing on prospects in this burgeoning domain by establishing a conducive atmosphere by implementing guidelines, committees, and focused initiatives.

China’s adoption of Web3 technologies represents a departure from its stance of prohibiting cryptocurrencies and imposing severe penalties on mining operations.

Concerns remain, however, regarding the digital yuan, the central bank digital currency (CBDC) issued by the Chinese central bank.

Although marketed as a cutting-edge payment system, the digital yuan exposes authorities to an unprecedented level of surveillance and control.