After a long battle with the industry, it seems China’s plan to bring the Blockchain industry under its complete control is coming into full effect with the new law drafted by the Chinese government guiding use of blockchain in the country.
The new law mandates all users to register with their government issued ID Cards or be denied whatever service they need. China had banned trade in Bitcoin, ICOs and launch of digital currencies last year, but this new regulation will further tighten the rope around the industry thus reducing freedom of anonymity and privacy that are inherent in the development of blockchain technology.
Although the government says the new regulations are open for public comments until 2 November 2018, some people believe it is just to fulfill all righteousness as the government is not likely to amend the regulations on the grounds of public comments or opinions.
The new law among other things requires that blockchain service providers ensure no “illegal information” stays around long enough to spread among those who should not see it. They are also required to retain information of users for at least six months and make such information available to law enforcement on request.
The law aso spells punishment for users who break the law which may be a warning, restricted access to account or closure of such accounts at the service provider’s discretion.
Being one of the most technologically advanced countries in the world, China is one of the largest blockchain market in the world with major blockchain funds in Shenzhen and Hangzhou.
Its restrictions on blockchain is however evident in its mobile payments industry which unlike PayPal, WeChat Pay and other payment companies requires users to register with verified ID cards and a fee of over $140 to access such services. In fact, a Chinese phone number is required to access many web services in the country.
According a research published earlier in October 2018, China has twice as many blockchain patents as the United States. The Digital Currency Research Lab (DCRL) in China which published the data of the research indicated China currently occupies most of the top slots on the list of 41 patents published by the company.
This data certainly shows that China encourages the use of blockchain but from all indications it is determined to remove the privacy and anonymity aspect of the technology which is an important component. Although the date for enacting the law is not certain yet, will the industry survive in the country when this new regulation in force?
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