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China's Roadmap to Web3 Innovation: New White Paper

China Roadmap to Web3 Innovation: New White Paper unravels Beijing's plans for Web3 industry growth, the impact of these policies on the global digital economy, and its potential as a global innovation hub.

The Beijing municipal government’s recent unveiling of a white paper to advance the Web3 industry has garnered global attention, especially given the concurrent changes to digital asset regulations in Hong Kong. This pivotal move underscores China’s evolving stance towards the cryptocurrency sector.

Unveiling of the White Paper

The “Web3 Innovation and Development White Paper” was made public at the prominent Zhongguancun Forum by the Beijing Municipal Science and Technology Commission, also known as the Administrative Commission of Zhongguancun Science Park. A credible local news outlet, The Paper, acknowledged the document’s recognition of Web3 technology as an “inevitable trend for future Internet industry development.”

This ambitious move indicates Beijing’s objective to emerge as a global innovation hub for the digital economy, setting it on a clear trajectory. To propel this vision forward, the commission is committed to allotting a minimum of 100 million yuan ($14 million) annually until 2025. This funding was announced at the forum by Yang Hongfu, the director of the Zhongguancun Chaoyang Park management committee, in an area often dubbed as China’s Silicon Valley.

The Aim of the White Paper

The white paper offers more than just an outline; it underscores China’s aim to fortify policy support and hasten technological advancements in the Web3 industry. The timing of the white paper release has drawn particular attention, as it coincides with Hong Kong’s impending cryptocurrency regulations set to take effect from June 1. The CEO of Binance, Changpeng Zhao, has labeled this synchrony as “noteworthy,” drawing attention to the broader implications.

A Shift in Hong Kong’s Digital Asset Regulations

Just last week, Hong Kong’s Securities and Futures Commission introduced a fresh rulebook for the cryptocurrency industry. This new regulatory framework allows retail investors to participate in crypto trading from June 1. This move starkly contrasts the U.S. approach, where cryptocurrencies face heightened scrutiny.

Paul Chan, Hong Kong’s Financial Secretary, announced the completion of the government’s crypto regulation framework earlier this year. The region’s approach to cryptocurrency regulation is undergoing a significant shift, with virtual asset providers facing similar requirements to traditional financial institutions from June 1. Chan’s statements also emphasized Hong Kong’s dedication to supporting the growth of the Web3 industry.

Easing Regulatory Requirements in Hong Kong

The Hong Kong Securities and Future Commission (SFC) is now revising the requirements for responsible officers (ROs) on cryptocurrency exchanges, in light of the upcoming June 1 deadline for crypto trading licenses application. The term RO refers to an individual who holds a senior position within a company, and to be appointed as an RO, they must obtain a license from the SFC.

Considering the current shortage of experienced ROs in the crypto sector, the SFC has adopted a “pragmatic approach” and halved the required ROs from four to two. This significant move aims to solve the talent crunch in the cryptocurrency industry.

Crypto Industry: China Roadmap to Web3

China’s blanket ban on cryptocurrencies in 2021 marked a significant juncture in the nation’s relationship with digital assets. However, the unveiling of the Web3 white paper suggests a shift in China’s attitude towards the industry. Additionally, the airing of a cryptocurrency segment on China Central Television on May 23 raised eyebrows within the crypto community, especially as it historically correlated with market upswings.

China Roadmap to Web3: Looking Ahead

Both Beijing and Hong Kong’s developments in the digital asset sector will be watched closely, as they have the potential to shape the future of the industry not only in the region but globally. A more transparent regulatory environment could bring about increased innovation, while new challenges could emerge in meeting compliance requirements and adapting to these evolving regulations.

It remains to be seen how these developments will shape the future landscape of digital assets, but one thing is clear: China’s engagement in this sector is shifting gears, marking a potentially exciting new chapter in the global digital economy.