Shanghai announced plans to establish a blockchain infrastructure, aiming to streamline its processes within its economy, public services, and its governing body. The government hopes to have the blockchain infrastructure fully implemented by 2025.
According to an article by CoinGeek, Shanghai is setting its sights on becoming an international epicenter for blockchain technology. The initiative will be overseen by a “market-led, industry-university-research collaboration,” and the city’s government plans to build five research and development organizations in order to attract top talent and focus on innovation.
As the government of Shanghai begins to lay the groundwork for the significant effort, it will be looking to test blockchain technology in various ways, including carbon reduction and supply chain finance.
“This is one more example of China’s ongoing support for blockchain technology,” said James Wester, Director of Cryptocurrency and Co-Head of Payments at Javelin Strategy & Research. “It has been considered a strategic technology by the Chinese government since 2019, and there have been various incentives and programs developed across China to encourage development of use cases.”
“Not surprisingly, the Chinese are not as interested in decentralized applications, but the efforts in Shanghai are in keeping with the overall interest and investment in blockchain in China,” he said.
Crypto Is No Longer a Fringe Topic
Crypto has experienced a monumental shift within the financial landscape over the past few years. And it’s now being factored into international trade, primarily because of its lower transaction costs and faster payment processing.
This year, the crypto market is expected to exceed $2 trillion, and it’s continuing to attract new players and digital currencies, eager to capitalize on these opportunities.
However, with all the clear advantages that crypto offers—security, faster payments, and lower transaction costs—there is still that proverbial elephant in the room: Its unpredictability in the marketplace presents real challenges that can translate into serious losses.
Adding to these challenges are the constant threats of regulation from governments around the world, as many fear that cryptocurrencies could be the gateway to illicit activities.
While there’s still much to work out within the crypto landscape, there’s no doubt that crypto has made its mark on the financial landscape. And the government of Shanghai sees the opportunity of crypto and has already placed big bets on it.