China Passes Cryptography Law, Into Effect in 2020
- The new law will set standards for the application of cryptography in the country, and also aims to tackle regulatory and legal challenges.
- It also calls for the creation of a central cryptographic agency, which will establish guidelines and policies for the industry.
Chinese new year drawing. Freepik
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.
- The head of China’s central bank digital currency institute said the e-CNY has undergone a major upgrade, and should be made available as an option in all retail scenarios.
- The PBOC official noted that platforms can integrate the CBDC in the short term using QR codes, and focus on upgrading their payment tools in the long run.
Office building of the People’s Bank of China. Flickr
- The team behind Multichain confirmed that their CEO was detained in China on 21 May, and that all of his electronic devices were confiscated by the local police.
- The CEO’s sister moved the project’s remaining funds to wallets under her control on 9 July, and several days later was also detained by the police, leaving the team with no funds.
- A new 13-count superseding indictment has accused Sam Bankman Fried of bribing one or more Chinese officials in order to unfreeze accounts connected to Alameda.
- In early 2021, Chinese authorities froze certain Alameda accounts on two of China’s largest crypto exchanges”, which reportedly held more than $1 billion worth of crypto assets.