China Pursues NFT, DApp Growth Despite Cryptocurrency Prohibition

China is gearing up to foster the development of Non-Fungible Tokens (NFTs) and decentralized applications (dApps) despite maintaining strict restrictions on cryptocurrency usage within its borders.

The Ministry of Industry and Information Technology (MIIT) in China unveiled strategic plans to advance blockchain technologies and Web3 applications, as outlined in an official release. This initiative was in response to an inquiry by Johnny Ng, a member of the CPPCC National Committee, one of the country’s prominent political advisory boards.

While conventional cryptocurrency applications remain banned in the country, the proposed development plans emphasize blockchain-based projects in government and industrial sectors. The MIIT aims to initiate pilot projects focusing on distributed digital identity (DID), aiming to explore the potential for public digital identity verification.

China's crackdown on cryptocurrencies was pronounced in September 2021 when the People’s Bank of China declared all cryptocurrency transactions illegal.

Despite the cryptocurrency prohibition, the recent push by the Chinese government to explore blockchain and Web3 developments mirrors a broader trend. Various state entities have been rolling out innovative applications leveraging blockchain technology. Notably, the Ministry of Public Security launched the RealDID platform, deploying public identity verification applications, signaling the nation's ongoing interest in exploring these technological avenues.

The government's shift towards exploring blockchain beyond cryptocurrency applications suggests a growing recognition of the broader potential of decentralized technologies in areas such as identity authentication and public services.