With rumblings of the Chinese government giving Hong Kong permission to liberalize cryptocurrency activity in the area and turning it into a hub for the world of Web 3.0 and digital assets, many are hoping that the country will follow through on its decision to ban cryptocurrencies across the board on the mainland. China should reconsider and adopt a more liberal approach towards digital currency investment and trading.
According to Wallex and quoted by Forkast, we see signs of China’s new approach to blockchain technology and digital assets. In this new approach, this field has the potential of economic propulsion. What you will read is a summary of a note written by Lily King. Lily King is a law student from George Washington University and has many years of experience working in investment funds and Asian exchanges. He is also a researcher of developments in the field of digital currency in China.
He mentioned in this note, there is rarely a change in China except with the express or implied permission of the government of this country. Until now, the use cases of blockchain technology, which has been supported by the central government of this country, have had little to do with its features such as decentralization and permissionlessness.
One of the main manifestations of China’s turn to crypto is the country’s plan to issue and mint its national digital currency – the digital yuan eCNY. Recently, the ability to support smart contracts has been added to this currency. Another such event was the establishment of a digital asset exchange in Beijing at the beginning of this year. This exchange, which has the support of government institutions, provides the possibility of exchanging digital collectibles and NFT tokens between users in a legal way.
China is looking to repeat its Web 2 development model; It means building an independent and separate ecosystem from the global ecosystem or public blockchains. The Chinese government has been the leader in the field of public acceptance of the national digital currency among the countries of the world, and in this way it has taken ideas from the blockchain industry; An idea like programmable money.
Smart contracts allow digital yuan to interact with commercial “super apps”, but unlike smart contracts in public blockchains that anyone can set up in the network, access to this feature is only possible with government permission.
The China Digital Asset exchange, which was established in January with the support of several government entities, claims to be the first active and compliant platform in China to support trading of NFT tokens and digital collectibles between users. Prior to the launch of this store, previous digital collectibles platforms in mainland China did not allow users to sell their collectibles.
The store is also looking to create its own private blockchain to record and validate ownership and intellectual property rights of digital assets.
Most likely, we will see more such stores and markets in China. What is evident is that China is looking to regulate the field of NFTs. Currently, only a few companies are officially licensed to create and publish digital collectibles.
In both the national digital currency (CBDC) and Web 3.0 sectors, China is seeking to become a world leader in these areas, but at the same time wants to distance itself from the “Western” Web 3.0 values of freedom, privacy, and decentralization. .
This approach does not conflict with the freedom of action given to Hong Kong in the field of Web 3.0. Hong Kong has always been considered as a bridge to connect the society under the control of mainland China to the international world. Such an approach can also be true in the Web 3.0 space.
With the bitter events that happened in the space of digital currencies last year, the western world is looking to strengthen its regulations regarding this industry. In such an environment, it will not be difficult to justify the Chinese version of the digital asset industry.
But blockchain is also called the “trust machine” because it allows people to agree on a common outcome without the need for trust. In fact, as much as it is a technological development, blockchain is also a social trend. If we remove decentralization from blockchains, will this technology have an advantage over existing centralized technologies?
If there is no decentralized infrastructure for Web 3.0, the behavior of users will be more under the supervision and control of governments (or any central operator). Will users outside of China accept such a problem?
We will have to wait a few years to see the results of the Chinese and centralized version of Web 3.0.
The article on the development of Web 3.0 in China; More restrictions or entering the free world? The first time in the blog Valx. appeared.
