China is currently looking into the metaverse. While many companies are starting to create digital universes, the Chinese government is already working on a regulatory framework to prevent abuses. At the same time, Beijing wants to develop a metaverse of its own, the Yuan Universe, to apply its own rules.
China already calls for regulation of the metaverse
The rise of the metaverse has attracted the attention of China. The Chinese authorities mentioned the metaverse for the first time during the National People’s Congress, reports The Paper, a local media close to the Communist Party. This legislative body meets every year for two weeks.
This year, two congressional meetings were devoted to the regulation of the metaverse. In this context, Kong Falong, a member of the National People’s Congress, called on his peers to establish a national metaverse research institute.
Aware of the growing interest of Chinese companies in digital worlds, the deputy called for “setting standards”, “clarifying boundaries” and determining “red lines and forbidden zones of the industry”. Specifically, the politician wants to establish a regulatory framework for brands that want to take advantage of the trend.
Zhang Ying, a member of the Chinese People’s Political Consultative Conference (CPPCC), made a similar point at a meeting, reports the People’s Daily, a media outlet designed to relay Beijing’s propaganda. The official said there is an urgent need to regulate the development of the metaverse.
“It is recommended to regulate the development, strengthen the legal system, improve relevant laws, regulations and judicial interpretations of digital assets. […] Relevant ministries should strengthen the supervision of the industry and crack down on illegal and criminal activities,”Zhang Ying believes.
Many China-based firms have entered the metaverse in recent months. The National Intellectual Property Administration of China has already received 16,000 trademark applications containing the term “metaverse”.
This is notably the case for ByteDance, parent company of the social network TikTok, Tencent and Alibaba. For these companies, the metaverse and related technologies, namely virtual or augmented reality, are new ways to attract young Internet users.
The creation of a “Yuan Universe” evoked in China
China will not only regulate the metaverse on its territory. Chinese legislators have already advocated the creation of a digital universe dedicated to the country’s residents, the “Yuan Universe”. This virtual world aims to combine social networks, streaming services and video game platforms.
To develop this China-only metaverse, Kong Falong wants to rely on blockchain. In recent years, the Chinese government has repeatedly demonstrated its growing interest in blockchain. Beijing has developed a private and centralized blockchain to protect its social credit system.
In parallel, several Chinese cities have already shown their interest in creating a metaverse. This is notably the case of the Hongkou district in Shanghai, which has inaugurated a $158 million fund dedicated to the development of digital universes.
No doubt that the digital yuan, the digital currency of China’s central bank, will sooner or later be added to this project. Thanks to this metaverse, which is entirely under its control, the Chinese government will be able to apply strict censorship, similar to that already imposed on the Internet, explains Hanyu Liu, a China market analyst at CNBC.
“We should expect to see strict censorship there, which means that there will most likely be an isolated Chinese metaverse that is separate from the international,”Hanyu Liu points out.