Shanghai Encourages Growth of The NFT Metaverse

Over the next five years, the most populated metropolis, Shanghai, in the most populous nation in the world intends to enhance support for metaverse technical developments. Although other technologies like Web3, NFTs, and blockchain were discussed as well, it is still unclear exactly what function these would play in the future. On July 13, the Shanghai city administration made the draft of the “14th Five-Year Plan for the Development of Shanghai’s Digital Economy” available for public scrutiny.

In the declaration, the government pledged its support for “the comprehensive integration of digital technology and the traditional economy.” The remark continued to imply that “scientists evaluating the potential of technology” and “entrepreneurs discovering the need in the market” would achieve this goal.

Shanghai’s attempts to “strengthen cutting-edge technological advancements” would mostly concentrate on virtual reality headsets, CPUs, cloud computing, 5G technology, and other channels.

According to the report, 10 billion Yuan, or $1.5 billion, had been put aside to carry out the plan. The Shanghai government has great hopes that the investment will kick-start the local economy and spur expansion.

The distribution of government money will result in the creation of ten “leading” businesses that will act as “chain-owner enterprises.” These enormous businesses will compete with one another on the global market. About one hundred smaller businesses will have mastered the fundamental metaverse technology.

These businesses will work together to achieve the goal of “benchmarking products and services,” according to Wu Jincheng, head of Shanghai’s Economy and Information Technology Committee, who made the announcement at a press conference on July 8. These businesses will work together to accomplish this objective.

Although the development of NFTs and other cryptocurrency projects like blockchain and Web3 were briefly mentioned in the plan, it seems that the metaverse is the strategy’s main focus. With a focus on virtual concerts, idols, sports, and other types of digital entertainment, Shanghai’s governing body will hasten the development of the metaverse platform.

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Mr. Wu claims that financial support for the metaverse “would encourage the transformation and upgrading of many industries in the actual economy.” Additionally, he asserted that the metaverse has a “huge market value.” The combined total income for these three industries is expected to reach $224 billion by 2025.

The plan says the government will support expanding companies building NFT trading platforms and “research and promote the digitalization of NFT and other assets,” although recently, the government’s position on cryptocurrencies has been a little ambiguous. The state-run journal Economic Daily has recently advised its readers against investing in cryptocurrencies due to the recent decrease in their value.

And yet, according to data obtained by Statista, China, Hong Kong, and Singapore have the largest proportions of persons interested in NFTs and the metaverse compared to any other location. In spite of a crackdown on bitcoin mining activities that occurred in 2021, China has also recently established itself as a significant mining hub, second only to the United States.

The strategy is focused on creating blockchain+ technology, which will be supported by a blockchain development ecosystem with strong innovation and autonomous control. Additionally, plans are being made to do Web3 research. Over the next five years, research will be conducted in areas such as multi-platform OpenID, distrusted data storage, and a decentralized domain name resolution system (DNS).

At no time in the strategy were the potential advantages of decentralized financing (DeFi) raised. However, the proposal promised to promote “smart contracts” and to enhance “asset trading, payment and settlement, as well as registration and custody” in addition to addressing “digital finance”.

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