China will begin to enforce new regulations for blockchain platforms from next month.
According to a report from Reuters, the rules will be overseen by the Cyberspace Administration of China (CAC) and are designed to (in its words) “advance the industry’s healthy and orderly development.”
It will mean that blockchain platforms based in the country will have to implement systems that allow the censorship of content, as well as allow authorities there to access stored data and check user identities against national ID details or a telephone number.
While China has consistently sought to suppress use of cryptocurrencies in the last couple of years – through a ban on ICOs and cryptocurrency exchanges within its borders, it has simultaneously been fervently pro-blockchain. The enthusiasm of authorities only seems to stretch to seeing it as a massive business opportunity, however, especially in cost-reduction or streamlining within the supply chains which its massive manufacturing concerns form a key part of. The country, of course, largely leads the way in terms of cryptocurrency mining – much to the chagrin of some in the industry.
These rules, however, have been in the pipeline for some time – having been first put forward in October of 2018 – and seek to rein in the activities of blockchain-based services and dApps, at least as far as they are offered to the country’s own citizens. They will inform the business decision of giants like Baidu, which have been busy putting together blockchain-based plans to expand its services, and allow its open source Xuperchain protocol to become a platform on which others can build. All of these ideas, however, will now have to conform to the CAC rules.
Companies violating the new edicts will be liable for fines or criminal prosecution, a statement added.
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A Blockchain is a growing list of records, called blocks, which are linked using cryptography. Cryptography is the practice and study of techniques for secure communication in the presence of third party adversaries. Cryptocurrency is a digital currency that uses encryption (cryptography) to regulate the generation of currency and verify the transfer of funds, independently of a central bank.
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