A new cryptography law has been passed by the Standing Committee of the 13th National People’s Congress in China, local news outlet CCTV reported on 26 October.
According to the report, the new law will go into effect on 1 January 2020, and will set standards for the application of cryptography in the country.
The law also aims at tackling regulatory and legal challenges in the commercial cryptography use-cases, as they play a big role in the development of the Chinese economy.
The latest draft proposal, published on 7 May, reads:
“Clear guidelines and regulations are needed to evaluate commercial cryptography technologies used in the major fields related to the national interest as the current ‘loose’ system is not suitable for the industry anymore.”
Cryptography is an integral part of the blockchain technology, which the president of China thinks should be adopted quicker in the country.
The new regulatory framework also calls for the creation of a central cryptographic agency, which will not only lead the public cryptographic work, but also establish guidelines and policies for the industry.
The national congress has also said that the new law will encourage the research and development of commercial cryptographic technologies.
Even though there is no set date for the release of Chnia’s Central Bank Digital Currency (CBDC), the new law could be building the foundation for it.
During his hearings before Congress on 23 October Facebook’s CEO, Mark Zuckerberg, has said that the U.S. dollar could be at risk from the Chinese superiority in the digital currency space.