There are many skeptics of China’s crypto-free Web3 strategy, and with good reason: Decentralized digital currencies are core building blocks of the third iteration of the internet. That said, we recall a colorful quote by then U.S. President Bill Clinton that likened tight control of the internet to “trying to nail jello to the wall.” And yet China has built a formidable self-contained internet ecosystem very different from the global version. With that in mind, it is worth watching Beijing’s Web3 initiatives closely.
Ever since blockchain technology became a “thing,” China has been interested in using it for a wide variety of applications, from trade finance to supply chain security. This interest in blockchain reflects the tech and science-forward thinking that prevails at the highest echelons of the Chinese state.
However, the Chinese government is not interested in – and indeed opposes – the idea of using blockchain to facilitate privatization of the financial system. In today’s China, technology should be used to align with and further state objectives – not compete with state authority.
This unique ethos informs China’s approach to Web3, which it sees as an extension of an already substantial Chinese digital financial services ecosystem.
Meanwhile, the buzzword associated with this fund is “meta-assets” as its focus will be on virtual reality, the metaverse and NFTs. Unsurprisingly, the fund has lofty ambitions: to transform the GBA into the world’s “meta-asset capital.” Anything less might be considered insufficiently ambitious.
Haolong Li, chairman of GBA Capital, said earlier this month that the fund would “hold meta-asset global tours in Japan, Singapore, Dubai, Silicon Valley, Europe, and other places” to improve the visibility of meta-assets.
Looking ahead, China plans to a draft a national Web3 plan, according to its Ministry of Industry and Information Technology. The proposed draft will seek to encourage “new business models”, such as NFTs and decentralized applications, while deepening the public’s understanding of Web3 technologies, according to the MIIT. It added that China also plans to roll out pilot applications for decentralized digital identities.