- J Markezic and S Pettigrove
Shanghai Govt launches $1.5B Metaverse Development Fund
The Shanghai Government has announced the launch of a US$1.5 billion Metaverse Development Fund as part of measures designed to boost its post-pandemic economy recovery.
According to Hong Kong-based media outlet, the South China Morning Post, the fund will help Shanghai foster 10 "leading" companies, and 100 small firms which could launch at least 100 "benchmarking products and services". Head of Shanghai's Economy and Information Technology Committee, Wu Jincheng, commented that:
The Metaverse will drive the transformation and upgrading of various industries in the real economy.
The Shanghai Government is also backing investments in low-carbon energy projects and small terminal technology. Jincheng added that there was "huge market value" in the three sectors, which are estimated to be worth approximately US$224 billion by 2025. The Shanghai Government has also identified the metaverse as one of its four 'frontiers for exploration' in its five year plan published in December 2021.
Shanghai's announcement follows a tumultuous period for Web3 technologies in China. In September 2021, the Central Government launched a crackdown on trading cryptocurrencies and Bitcoin mining. In recent times, State-run media outlets and regulators, such as the China Banking and Insurance Regulatory Commission, have issued several warnings with respect to illegal fundraising schemes associated with the metaverse and various cryptocurrencies.
Notwithstanding these developments, a consortium of Chinese companies with links to the Government has reportedly been building a Blockchain-based Service Network (BSN) targeted at companies offering computing infrastructure services. China is also pushing ahead with the development of its CBDC, the eCNY, and has re-emerged as a leading Bitcoin mining center trailing only the United States.
Mirroring its approach to the early days of the Internet, China's apparent strategy is to seek to secure the economic and technology benefits associated with blockchain and Web3 technologies while maintaining control over markets and data. It remains to be seen how this will play out in the Web3 era with its focus on the benefits of decentralisation and permissionless systems.