China Plans to Develop Blockchain-Focused National Data Infrastructure By 2029

China's government on Monday released guidelines for the development of a national data infrastructure, as part of efforts to improve its data exchange and management network. A document published by the National Development and Reform Commission and two other authorities states that China must explore blockchain technology to make its data exchange and management ecosystems more secured through smart contracts. Also called the distributed ledger technology (DLT), the blockchain is the underlaying technology used by cryptocurrencies, NFTs, and the metaverse.

According to the document titled National Data Infrastructure Construction Guidelines”, a blockchain-based implementation can safeguard stored data against tampering. The authorities behind the project believe that the national data infrastructure must be kept up-to-date to support the circulation and storage of information that is important in terms of national security.

In recent years, blockchain networks have emerged as a potential replacement for traditional Web2 servers. A blockchain does not concentrate large amounts of data at one point, unlike traditional servers. Instead, information saved on blockchain networks is segregated into multiple smaller units of data, and these are spread across the network. This protects the data against leaks and breaches. In addition, blockchain networks log data permanently and in an unalterable format — which brings a layer of trust and transparency to data storage.

China's Blockchain Plans

China plans to work on new database solutions that would be supported on blockchain networks, it said in the guidelines. The updated data management solutions that the Asian nation is betting on will integrate hardware, software, and model algorithms together to be used by the government, industries, and enterprises operating there.

“(These) features are mainly used to solve trust and security issues in the process of data circulation,” the guidelines noted.

Creating a trusted data circulation system, data delivery system, and data application system for industries is part of the government's plan.

The country aims to deploy the main structure of this blockchain-supported data infrastructure by 2029 — it will need to finish the top level design of the system by 2026, and integrate data networks and computing power facilities by 2028.

China's History with Blockchain

While China imposed a blanket ban on all crypto-related activities in 2021, it continued to show an inclination in experimenting with blockchain technology. The country is also working on its own central bank digital currency (CBDC).

In 2022, the Cyberspace Administration of China (CAC) launched a nationwide programme to focus on blockchain-related research and development. The CAC is the central Internet regulator of China.

Last April, China launched the ‘Ultra-Large Scale Blockchain Infrastructure Platform for the Belt and Road Initiative'. The aim of this initiative was to develop a global infrastructure through which China aimed to connect continents across land and sea.

The country has also formed a standard-setting body comprised of Huawei and Tencent to define rules to oversee the expansion of metaverse-related developments.