The Shanghai government has issued new guidelines to encourage the adoption of blockchain, the metaverse, and digital yuan in various industries across the city. Market participants in the automotive, commodity trading, and e-commerce sectors will be required to incorporate and explore the application of these technologies in their operations.
According to the guidelines, the government will provide support for platforms that aim to enhance the digitalization of production, operation, and management processes.
Additionally, the development of information technology services centered around big data, blockchain, the Internet of Things, artificial intelligence, and the mobile Internet will be promoted.
The government is placing great emphasis on the creation of a superior internet system to enhance its local commodity trading service. It has expressed its reliance on “the national financial factor market” to upgrade the over-the-counter derivatives platform for bulk commodities and strengthen the linkage between futures and cash.
Other projected developments for the province include expanding e-commerce service platforms for industrial products, establishing a digital transformation service platform, and enhancing the development and application of data resources.
Shanghai, known as the financial hub of China, is fully embracing the innovative advantages offered by recent technological tools like blockchain and AI. However, China’s relationship with cryptocurrency is complex.
On one hand, the Chinese government has shown support for blockchain technology, which serves as the foundation of cryptocurrency. On the other hand, the government has taken strict measures against cryptocurrency trading and mining on multiple occasions.
In 2013, the Chinese government banned initial coin offerings (ICOs), a method used to raise funds for cryptocurrency projects. Four years later, cryptocurrency exchanges were banned, followed by a ban on cryptocurrency mining in 2021.
The Chinese government’s crackdown on cryptocurrency is driven by several factors, including financial stability. The government is concerned about the potential for cryptocurrency to be exploited for illicit activities like money laundering. Furthermore, they worry that cryptocurrency could undermine the value of the yuan, the Chinese currency.
Another significant factor is the government’s environmental concerns. Cryptocurrency mining is an extremely energy-intensive process, and the Chinese government is alarmed by its environmental impact.