The Chinese blockchain industry is about to come under heavy scrutiny as the Cyberspace Administration of China (CAC) has introduced new regulations for blockchain firms operating in the country.
The regulatory body published this announcement on their website, stating that the new regulations will come into effect next month and will advance the industry’s healthy and orderly development.
Per the published document, all blockchain-related companies including websites and mobile apps that provide information or technical support to the public using blockchain technology are subject to the anti-anonymity regulations.
Stringent Anti-Anonymity Regulations
As soon as the regulations come in effect on February 15, 2019, all blockchain-related businesses will be required to register their names, domains and server addresses at the CAC within 20 days.
New blockchain platforms will be required to implement the strict Know Your Customer (KYC) measures such as requiring real name registration for users via a national ID or telephone number. Also, blockchain startups must allow authorities access to any stored data from users or the company.
Blockchain companies will also be obliged to oversee all content and censor information so that it is compliant under Chinese law.
Failure to comply with these new regulations may result in fines anywhere from ¥20,000 to ¥30,000 (approximately US$2,900 to US$4,400). Or for more extreme offenses, prosecution from the CAC may occur.
The move to implement these anti-anonymity regulations have been in the works for some time now. Back in October 2018, the CAC issued draft guidelines which included the elimination of anonymity in the blockchain.
China’s Stance on Cryptocurrency and Blockchain
The newfound anti-anonymity regulations being imposed by China really comes as no surprise.
The communist country has a very strict policy on censoring content and data privacy. The government wants to remain in full control to better develop and advance their nation in an orderly fashion.
Since cryptocurrency and blockchain technology have the potential to provide people with a great deal of freedom and privacy, the Chinese government feels the need to implement these strict regulations.
Also, this is not the first time the Chinese government cracked down on cryptocurrency and blockchain. Back in 2017, the government banned initial coin offerings (ICOs) and barred cryptocurrency exchanges from operating within the country.
Moreover, in February 2018 the government made it even more difficult for Chinese cryptocurrency investors to get involved when they added international crypto exchanges and initial coin offerings (ICO) websites to China’s Great Firewall.
Overall though, blockchain and cryptocurrencies still have their use in China.
Apart from hindering innovation in the crypto industry, the Chinese government is piloting blockchain legislation in 3 regions— Beijing, Shanghai, and Guangzhou. This is being done to better develop the blockchain industry and to find a balance between innovation, regulation, and security.
Do you agree with China’s approach to cryptocurrency and the blockchain industry? Will these regulations only hurt China in the long run by forcing innovation out of the country? Let us know what you think in the comment section below.