<p>In a bid to stay at the forefront of technological advancements, the government of China’s largest and most populous city, Shanghai, has issued a set of guidelines aimed at promoting the widespread adoption of blockchain, the metaverse, and the digital yuan.</p><h2 id="header-0">Integrating blockchain technology</h2><p>The objective of the measure is to further the use of these technologies across various industries within the city. Leading enterprises across a range of industry sectors, such as automotive, commodity trading, and e-commerce, are now required to look to incorporate these technologies into their operations.</p><p>The guidelines, which were<a href="https://www.shanghai.gov.cn/nw12344/20230718/f42175d59bb64e1c915e23695651b602.html" rel="noopener noreferrer nofollow"> published</a> last Tuesday, outline the government’s commitment to providing support for platforms that seek to enhance digitalization in production, operations, and management processes. Additionally, they emphasize the development of information technology services centered around big data, blockchain, the Internet of Things, artificial intelligence, and the mobile Internet.</p><h2 id="header-1">Bolstering commodity trading</h2><p>A key focus for the government is the establishment of a robust internet system to bolster its local commodity trading service. This move is driven by a reliance on “the national financial factor market,” which aims to upgrade the over-the-counter derivatives platform for bulk commodities and strengthen the linkages between futures and cash.</p><p>Furthermore, the guidelines pave the way for expanding e-commerce service platforms for industrial products, setting up a digital transformation service platform, and fostering the development and application of data resources.</p><p>Shanghai’s status as China’s financial hub makes it an ideal testing ground for innovative technologies like blockchain and AI. However, China’s approach to cryptocurrency is more complex. It involves support for blockchain technology while at the same time applying strict measures against crypto trading and mining.</p><h2 id="header-2">Aligning with central government policy</h2><p>The Chinese government’s support for blockchain technology stems from its recognition of blockchain as the underlying foundation of cryptocurrencies. Judging by the blockchain initiatives forwarded by the central government and regional Chinese administrations in recent months, it’s clear that China is keen to develop leadership in the use of blockchain across various sectors. It takes a different view, however, when it comes to projects related to decentralized cryptocurrencies and crypto trading.</p><p>In recent years, China has cracked down on cryptocurrency activities. In 2013, the government banned initial coin offerings (ICOs), a fundraising method used for cryptocurrency projects. Subsequently, cryptocurrency exchanges were banned in 2017, followed by a prohibition on cryptocurrency mining in 2021.</p><p>Several factors contribute to the Chinese government’s cautious approach to cryptocurrency. One major concern is financial stability, as crypto can be exploited for illicit activities like money laundering. According to a<a href="https://medium.com/&#64;coinness.gl/chinas-crypto-crackdown-reveals-capital-control-loopholes-4fa530558bec" rel="noopener noreferrer nofollow"> recent report</a>, Chinese authorities are redoubling their efforts in pushing back against the use of crypto as they’re finding that it is being used to exploit capital control loopholes.</p><p>These recent guidelines from Shanghai’s administrators aim to capitalize on the transformative potential of emerging technologies while ensuring prudent regulation and control over cryptocurrency-related activities in line with current central government policy emanating from Beijing.</p>

Shanghai Embraces Blockchain, AI, and Digital Yuan with New Guidelines

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