Commercial endeavors in the field of blockchain and cryptography will need to follow guidelines and regulations imposed by the state, according to a new law in China. The Chinese Standing Committee of the 13th National People’s Congress passed the law this Saturday. As a result it will be effective on January 1st 2020, according to the Chinese state press agency Xinhua.
The committee claims that the current ‘loose system is not in the interest of the nation’. The new law needs to encourage research and development on commercial cryptography technologies in China. They believe that with this in mind a standardized regulatory system will help the blockchain market to grow.
China is very serious about the adoption of cryptography, cryptocurrencies and blockchain technology. The country wants to inform its citizens as much as possible. There will be nationwide educational efforts, like public exhibitions, to promote cryptography. This promotion will take place among government officials, companies and social groups.
One day after presidential support
The new law comes one day after President Xi Jinping stated that the country should embrace blockchain technology. The Chinese president sees blockchain technology as an innovation, which will bring economic growth to his country.
Despite the presidential remarks and the new law, trading cryptocurrencies on an exchange is still illegal in China. Even though bitcoin is protected property by law. On top of that there’s still no clear time frame for the launch of China’s digital yuan. The Chinese central bank announced the Central Bank Digital Currency (CBDC) earlier this year.
Governments start using blockchain
Around the world there are examples of governments that implement blockchain technology. For example, on Malta the government puts rental contracts on the blockchain to combat fraud. In addition, Turkey is going to use blockchain to register academic diplomas and land ownership. Another example would be South Korea, where the government wants to put all its trading business on the blockchain. This would cut costs with 90 percent.
In other countries legal frame works and the introduction of CBDC’s are contributing to the adoption of blockchain technology. In San Marino they’ve even announced a reward system, where green citizens receive crypto bonuses.
Also published on Medium.