Web3, often used interchangeably with cryptocurrencies and NFTs, refers to the internet built on decentralized blockchains. While this concept has gained global attention, China has been pursuing its unique path in web3, which notably excludes crypto-related activities. However, a recent white paper released by the Beijing Municipal Science & Technology Commission and the Administrative Commission of Zhongguancun Science Park offers insights into China’s stance on web3 and its vision for Internet 3.0. It is important to note that the white paper originates from Zhongguancun, a designated high-tech industrial zone housing prominent Chinese tech companies. Therefore, the views expressed in the paper may not reflect the official position of Beijing’s municipal government or the nation’s top policymakers. Nonetheless, the document provides valuable information on how Chinese officials perceive Internet 3.0 and its relationship with web3.

According to the white paper, Internet 3.0 is described as a “three-dimensional space that combines virtual and real realms with a highly immersive interactive experience.” The vision for Internet 3.0 revolves around improving human-information interaction, enhancing economic activities, and embracing a high level of intelligence and virtual-real integration. While web3 is an integral part of this immersive world, the paper emphasizes that Internet 3.0 encompasses augmented reality (AR), virtual reality (VR), the metaverse, and other concepts that highlight the integration of the virtual and real worlds.

The timing of the white paper’s release is particularly interesting, considering recent developments in Hong Kong’s regulatory framework for cryptocurrencies. Unlike mainland China’s stringent crackdown on crypto trading, Hong Kong has implemented a new crypto-friendly regime, allowing licensed exchanges to serve retail investors. However, this regulatory shift only applies to Hong Kong residents, with mainland users still prohibited from accessing these services. Nevertheless, the changes in Hong Kong are instilling confidence among crypto investors and developers in mainland China, indicating a potential softening stance towards digital assets. Furthermore, the white paper signifies China’s willingness to incorporate web3 into its future internet landscape. It acknowledges figures like Gavin Wood, co-founder of Ethereum, who introduced the concept of web3 and its inclusive protocols that empower application developers.

The paper also references Beeple’s NFT auction at Christie’s, recognizing the mainstream attention it garnered. In terms of tangible implementation, the white paper aligns with Western technologists by emphasizing web3’s capability to enable users to read, write, and own data. It envisions web3 as a crucial foundation for identity verification, data authentication, asset trading, and regulation in the metaverse.

This perspective indicates a positive outlook on blockchain adoption in China. The country’s public and private sectors have been cautiously exploring blockchain in various fields that do not involve cryptocurrencies. Chinese regulators are wary of speculative activities and market volatility associated with cryptocurrencies. Instead of censorship-resistant public blockchains, China encourages the use of consortium blockchains governed by selected participants rather than the public. For instance, Ant Group, Alibaba’s fintech affiliate, has launched a consortium blockchain for small enterprises and developers to build trust in multi-party collaborations, including supply chain finance, product provenance, digital invoices, and charitable donations.

Overall, China’s approach to web3 demonstrates a nuanced perspective on the integration of blockchain technology and the virtual world. While crypto-related activities remain restricted, China is actively exploring the potential of web3 within the context of Internet 3.0. This signals a gradual shift and openness towards the transformative power of decentralized technologies, with a particular focus on identity verification, data ownership, and economic systems within the metaverse.

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