China’s largest city with a population over 26.32 million has decided to rely on blockchain and the metaverse to accelerate the nation’s economic growth.
The metaverse refers to an immersive virtual world, where digital representations of people can interact with each other like they do in real life. Virtual reality (VR) and augmented reality (AR) technologies are regarded as fundamental to the development of the metaverse, which is also considered as the next iteration of the internet.
According to Blockworks and the South China Morning post, the Shanghai government planned to establish a fund of roughly $10 billion yuan in assets, or roughly $1.5 billion, to put towards the development of the metaverse. That financing will help the Chinese metropolis foster 10 leading companies and 100 small-sized firms, which could launch at least 100 “benchmarking products and services” by 2025.
Being the financial and commercial hub of China, plans to ramp up support for the metaverse to seek answers to the nation’s most populous urban area to help lead the nation’s post-pandemic recovery.
China is still experiencing very harsh lockdowns as a result of the coronavirus pandemic. Chinese Premier Li Keqiang last week singled out Shanghai, along with the coastal provinces of Guangdong, Jiangsu, Zhejiang and Fujian, to help stabilise production and employment, unclog supply chain bottlenecks and steer the nation’s economy back on track, while controlling fresh Covid-19 outbreaks.
This new initiative, which includes backing the development of low-carbon projects and smart terminal industries, is expected to “build advantages for future development” and become a “starting point for accelerating economic recovery”, according to a press conference held by Shanghai government officials on Friday.
“[Industries] such as the metaverse and smart terminals are expected to constantly spur new business schemes and models,” said Wu Jincheng, head of Shanghai’s Economy and Information Technology Committee, at the press conference. “[These would] give rise to ‘killer’ applications and popular products, releasing huge market value.”
Wu added that investment in the metaverse “will drive the transformation and upgrading of various industries in the real economy” and that there is “huge market value” in the three aforementioned sectors which are estimated to be worth a combined $224 billion by 2025.
While local giants such as Alibaba and Tencent have been first-movers of China’s metaverse initiatives, the national government has been more critical and reproachful.
Shanghai pledged to guard against “excessive financial speculation and malicious hype” in that field, as regulators and some segments in China remain wary of the frenzy around metaverse projects.
In February, the China Banking and Insurance Regulatory Commission warned the public to stay alert to illegal fundraising schemes and scams related to the metaverse.
And the recent cryptocurrency market downturn led the state-run newspaper Economic Daily to dissuade citizens from adopting cryptocurrencies and warn investors of the risk of bitcoin “heading to zero,” according to the South China Morning Post.
Despite a government crackdown on Bitcoin mining operations last year, China has recently re-emerged as a major mining hub after the US.
All a bit confusing, huh?
Maybe one day we shall venture into Shanghai from our humble abodes.
Very exciting times ahead if further countries around the globe begin to dive into web 3.0 and the metaverse.
