Posted 1 year ago | by Ben Armstrong
China Approves First-Ever ‘Crypto Law’: Will Take Effect in January 2020
Chinese state-run CCTV reported that The Standing Committee of the 13th National People's Congress in China has passed a new law regulating cryptography on Oct. 26 that will take effect on Jan. 1, 2020.
The new regulatory framework sets standards for the application of cryptography and the management of passwords. It establishes the role of a central cryptographic agency, it meant to lead public cryptographic work, creating guidelines and policies for the industry.
Implicit Cryptocurrency Regulation
The draft of the law was published on May 7 which is largely focused on government centralized password management and does not explicitly mention cryptocurrency, though it does focus on cryptography, a key component underpinning cryptocurrencies such as Bitcoin, Ethereum, Litecoin, And Ripple’s XRP
A local news source explained:
“The key takes away is — the developing of new cryptography, hashing algo, even the usage of the tech, will be in the official legal realm. This means you need to follow the CCP standard for all ‘encrypted’ behaviors, which can be VERY broad, from mining to block propagation.”
Preparing for A National Crypto in China
Though there is no official timetable for its launch, the law is likely building a foundation for an upcoming Chinese national cryptocurrency.
As Cointelegraph reported yesterday, China's president President Xi Jinping considered that the country should "seize the opportunity" of bitcoin's blockchain technologies as the reason behind bitcoin's sudden rally. Xi said at the 18th collective study of the Political Bureau of the Central Committee in Beijing.
"We must take the blockchain as an important breakthrough for independent innovation of core technologies...(we must) clarify the main direction, increase investment, focus on several key core technologies, and accelerate the development of blockchain technology and industrial innovation."
Meanwhile, this past week, Facebook’s Mark Zuckerberg, who was savaged by U.S. senators over his plans for a bitcoin rival dubbed Libra, warned that Chinese superiority in the digital currency space could put the U.S. dollar at risk.
"China is moving quickly to launch a similar idea in the coming months. We can't sit here and assume that because America is today the leader that it will always get to be the leader if we don't innovate,” Zuckerberg argued in an official statement.