Recently, the National People’s Congress in China cleared a new law that will allow local authorities to start regulating all of the country’s cryptography-related activities starting from Jan. 1, 2020. By creating a new regulatory framework, the Chinese government is looking to establish a uniform standard for mainstream application of cryptographic techniques and the management of passwords and other sensitive data.
The initial proposal for the law was published all the way back in May. At the time, the rough draft focused quite strongly on government-centralized password management and did not mention crypto-related matters in detail, although, it is believed that this very law will be used by Chinese officials to govern their upcoming national CBDC (Central Bank Digital Currency) — even though there is no official timetable for the launch.
Additionally, on Oct. 24, President Xi Jinping called on his country’s tech community to accelerate their efforts in blockchain adoption as a core for digital innovation. These comments were made during a Politburo Committee session that was focused solely on blockchain technology and its utility across various industrial domains. A translation of Xi’s remarks during the session reads:
“We must take blockchain as an important breakthrough for independent innovation of core technologies, clarify the main directions, increase investment, focus on a number of key technologies, and accelerate the development of blockchain and industrial innovation.”
However, Xi’s apparent willingness to adopt blockchain comes against the backdrop of China’s long-standing aversion to cryptocurrencies — with the nation having banned initial coin offerings (ICOs) as well as all activities relating to digital currency trading a couple of years back.
What does this mean for the global crypto community?
To get a better understanding of the fallout from these developments, Cointelegraph reached out to Daniel Popa, the founder and CEO of Anchor — a crypto-based platform that aims to solve transparency and liquidity issues. He told Cointelegraph:
“President Xi Jinping recognizes the inevitability of blockchain technology integration across industry verticals and wisely seeks to place China in a leadership position when it comes to the development, application, and regulation of cryptocurrencies and blockchain-based products.”
Similarly, Alexey Ermakov, the CEO of crypto-centric banking service Aximetria, believes that while the United States and Europe are actively resisting crypto-backed innovations, other countries have begun to realize the potential behind the technology. Ermakov told Cointelegraph:
“We reach a completely different geopolitical level when competition arises not between companies and state regulators, but between global leaders, as we see with the latest announcement by China’s President Xi Jinping who wants to take a leading position in the blockchain industry. The competition between political leaders in the fintech industry will sparkle with completely new colors, benefiting all those states that contribute to development, and not resist it.”