In mainland China, Web3 startups can remain viable by focusing on non-financial applications and adhering to strict regulatory boundaries. The key is to avoid any activities related to token issuance, trading, fundraising, or promoting investment returns. Regulators describe four practical paths: category one treats Web3 as a technology and infrastructure layer; category two comprises de-financialized Web3 apps with a digital asset shell; category three covers compliance and industry services; category four enables going global while completing non-core processes in China. Category one positions blockchain as an IT service: distributed databases, collaboration tools, or system architectures; consortium or permissioned blockchains or surface-level service names are treated as information technology services.
The business model matters: B2B paid, project-based, or subscription-based is relatively clean, focusing on enterprise systems, government platforms, and industry middleware. Category two uses digital assets for digital content, rights, and certificates—e.g., digital collectibles, membership certificates, event passes—where the core value is immutable, verifiable certificates rather than investment returns. Digital collectibles, brand membership certificates, event passes, digital copyright labels, and digital identity badges are essentially all about using blockchain to issue an immutable and verifiable certificate. The real challenge for these projects isn’t telling Web3 narratives, but rather genuinely solving problems related to brand operations, user relationships, and content ownership.
Category three includes Web3-related businesses focused on compliance, risk control, and industry services. As regulation becomes clearer, demand for legal, compliance, risk analysis, auditing, on-chain monitoring, and anti-money laundering services rises. Category four involves splitting tasks: R&D, product design, protocol auditing, maintenance, risk modeling, data analysis, and compliance research can be done domestically as long as there is no token promotion or fundraising loop. Finally, avoid high-risk activities like token issuance, fundraising, promising returns, crypto trading matching, or promoting crypto investments, as these are likely illegal; treating Web3 as a technology and tool rather than a finance and asset can prolong entrepreneurial longevity.
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