- China Passes its First Crypto Law, Effective from January 2020
According to reports, China has passed its first crypto legislation. This was when the 13th National People’s Congress Standing Committee passed new legislation in a bid to adequately regulate cryptographic activities. The crypto law was passed on October 26. It will be effective from January 1, 2020, the report reads.
According to the report, the new regulatory framework is designed to set models for crypto application and password management. It will establish the assignment of a central cryptographic platform built to lead the public’s cryptographic work, and create guidelines as well as policies for the digital asset industry.
The Implications of China’s New Regulatory Framework
The draft of the new crypto law was put in motion on May 7 by one Chinese news outlet. It is largely focused on a centralized password management scheme undertaken by the Government. It does not explicitly mention the term cryptocurrency, however, it focuses on cryptography, which is a key ingredient for cryptos like Bitcoin.
According to one official:
“The key take away here is, the development of new cryptography projects, hashing and even the use of the tech, will happen in the official legal world. Meaning you will need to move along with the CCP standards for ‘encrypted’ behaviors. This can be very broad, as it covers mining to Block propagation.
The official concluded that the new crypto law is the foundation for the coming Chinese national crypto. Although there isn’t any official timetable for the project’s launch, according to a Chinese official in September.
As was earlier reported, on October 26, Xi Jinping, China’s President has made a call to action to his country. He is hoping that China accelerates its ambition regarding the adoption and deployment of Blockchain technology and crypto.
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Meanwhile, in the past week, Facebook Founder, Mark Zuckerberg, warned that the Chinese superiority in the virtual currency space could ensure that the United States Dollar is put at risk in a bid to ensure that lawmakers buy his plans for its crypto, Libra. Facebook’s cryptographic project has been grilled by lawmakers.
In his words via an official statement:
“China is moving quickly with its ambition to launch an idea similar to that of Libra in the coming months. We cannot sit here and automatically assume that because the United States is the leader today, that it will always be the leader. We can only stay on top if we continue to innovate.”