Wuhan backtracks on metaverse industry plan to support NFTs as cryptocurrencies remain a no-go in China

The central Chinese city of Wuhan has walked back a draft plan to attract non-fungible token (NFT) investments, as government officials remain wary of digital assets despite embracing blockchain development.

In the Wuhan government’s latest industrial plan on the city’s metaverse development from 2022 to 2025, a line about NFTs that appeared in the draft proposal in August is no longer found. The original plan stated that authorities would strengthen efforts to draw business and investment to the city in areas such as NFTs.

While the new version, published on Friday, still said that the government encourages companies to explore “decentralised operation models” and that it would promote the development of Web3, it made no mention of NFTs or digital collectibles.

Web3, a loosely defined concept, is commonly referred to as a next-generation internet based on decentralised technologies including blockchain. Outside mainland China, self-proclaimed Web3 applications often involve cryptocurrencies and NFTs.

In July, the Shanghai government pledged support for Web3 development for the first time as part of its 14th five-year plan, but entrepreneurs were sceptical about whether it would bring noticeable changes in a country that shuns cryptocurrencies and decentralisation.

In its new plan, Wuhan said it aims to cultivate or bring in more than 200 metaverse companies in the city, and build at least two metaverse industrial estates by 2025.

Meanwhile Hong Kong, which for the past few years has only permitted professional investors to trade cryptocurrencies, recently clarified that its stance on virtual assets is separate from mainland China’s.

On Monday, just ahead of the city’s FinTech Week event, authorities proposed a series of policy measures that they hope will restore Hong Kong’s status as a cryptocurrency hub, including a new licensing regime for virtual asset providers that will allow financial services to sell crypto-related assets to retail traders.

As a result, some mainland financial institutions, banned from any involvement with cryptocurrency assets at home, are now considering kicking off or reactivating virtual asset projects in Hong Kong, Deloitte China’s digital asset leader told the Post this week.