After imposing a ban on crypto businesses in September 2021, the Chinese government is looking to expand its blockchain network. Some people view this decision as a counter-strategy to what Hong Kong did in developing its position in digital asset management.
In February 2023, China approved a blockchain research center in Beijing. The main goal of this blockchain research center is to make developments while maintaining a ban on cryptocurrencies. According to reports, China’s blockchain center focus will be on blockchain’s theoretical underpinnings, software, and hardware. Additionally, it will help in the development of the country’s economy.
China is aiming to onboard 500,000 professionals who will be trained in blockchain technology as this remains a central theme of the country’s steps towards the digital economy. The research located in Beijing comes under the Ministry of Science and Technology. It will collaborate with various universities, think tanks, and research institutes to add expertise in blockchain management. According to the report, the center also plans to create a national blockchain network to link the country’s current blockchains and assist other sectors. Also, the research center is directed by the Beijing Academy of Blockchain and Edge Computing. For those who are not aware, the Beijing Academy of Blockchain and Edge Computing is a state-backed platform in China.
China collected information and expertise from at least 80 government departments on Chang’an Chain, (China’s first domestically developed open-source blockchain platform). This platform aims to effectively improve the security and order of government affairs and social data. Trading of cryptocurrencies is banned in mainland China but the trade of non-fungible tokens (NFTs) has been permitted in the country. However, they can be only traded in Yuan and not resold for profit. In December 2022, a Chinese court based in the city of Hangzhou directed that non-fungible tokens (NFTs) collections are online property and must be protected under the country’s law.
On the other hand, Hong Kong has taken a different approach to Web3 development. With rules establishing cryptocurrency as a new asset class, the city, which is administered separately under the “one country, two systems” agreement, has recently pushed to establish itself as a virtual asset center. Additionally, it put aside HK$50 million (US$6.4 million) earlier this year to support the growth of the Web3 business. It is forming a task group on virtual assets under the direction of the city’s finance director.