Shanghai wants to boost economic growth by tapping into new technologies
The most populous city in the world’s most populous country has officially unveiled plans to boost support for innovation in the metaverse over the next five years. Other technologies were also mentioned, such as blockchain, NFT, and Web 3, but it is not yet clear what role they will play in the future.
13 JulymShanghai Municipality released a draft of its “14m Five-year plan for the development of Shanghai’s digital economy. On paper, the government pledged to promote “deeper integration of digital technologies and the real economy”. The statement also said it would be achieved by “scientists judging technology potential” and “entrepreneurs discovering market needs”.
Shanghai wants to “strengthen technological advances” by focusing on virtual reality headsets, chips, cloud computing, 5G technology and other conduits.
10 billion yuan ($1.5 billion) has been allocated to see the plan through. Shanghai’s governing body hopes the investment will spur economic recovery and growth.
The government-directed fund will create ten “leading” companies that will serve as “chain-owned enterprises.” These large companies will compete in the international market. About 100 small companies will master the core Metaverse technology.
“These companies will work together to achieve the goal of product and service standards,” Wu Jincheng, head of Shanghai’s Economy and Information Technology Committee, told a press conference on July 8.
While the plan touches on NFT and other cryptocurrency endeavors such as the advancement of blockchain and Web 3, the metaverse appears to be its primary focus. Shanghai’s governing body will accelerate research and deployment of the Metaverse platform, emphasizing virtual concerts, idols, sports and other digital entertainment options.
Investments in Metaverse will “drive the transformation and upgrade of various industries in the real economy,” Mr. Wu said. He added that Metaverse has a “huge market value.” These three sectors are forecast to generate a combined $224 billion by 2025.
While the proposal is building NFT trading platforms and “researching and promoting the digitization of NFTs and other assets” indicating the government’s support for developing initiatives, the government’s attitude towards cryptocurrencies has been mixed of late. State-run newspaper Economic Daily has discouraged citizens from investing in cryptocurrencies due to the recent crypto market downturn.
And yet, data collected by Statista shows that interest in NFTs, including Metaverse, is higher in China, Hong Kong and Singapore than anywhere else. Additionally, China has recently re-emerged as a major mining hub behind the US despite a crackdown on Bitcoin mining operations in 2021.
The plan is committed to building blockchain+ technology supported by a blockchain development ecosystem with robust innovation and independent regulation. Planned searches on Web 3 are also underway. The five-year agenda includes research into multi-platform OpenID, trustless data storage and a decentralized domain name resolution system (DNS).
No word is mentioned about the possibility of decentralized finance (DeFi) in the plan. However, the proposal mentions “digital finance” by promising to promote smart contracts and improve trading of assets, payments and settlements, and registration and custody.
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