China Introduces Regulations For Blockchain Firms

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China Introduces Regulations For Blockchain Firms

On January 10, the Cyberspace Administration of China (CAC) announced new regulations for the blockchain companies that the agencies claim will ‘promote healthy development’ of the technology. The new rules will require blockchain platforms to remove “undesirable” content. Furthermore, authorities will now be able to check private data stored by the companies and the identity of users. Although the government appears to be coming down hard on blockchain companies, it is in favor of this technology over Cryptocurrencies.

China Says New Regulations Good For Industry

Beijing has introduced Internet Information Service Management Measures that will guide blockchain-based companies in the country. In a press release, CAC claimed that the new measures will promote the healthy development of the technology and associated services. The new measures will come into effect on February 15.

In the wake of increasing popularity of blockchain and Cryptocurrencies, China has been aggressive towards protecting its economy. With regard to the new measures, CAC said they are only intended to safeguard national security and public interest. The measures will also protect the rights and interests of the Chinese people.

Anonymity Stripped Under New Laws

The new measures will now require blockchain companies to use actual names when registering users. Furthermore, the users will also be supposed to provide their mobile numbers and national identity. Consequently, blockchain providers will not provide their services to users who fail to give this information. From Feb. 15, the companies will be forced to release stored data that is seen as a threat to state or contravenes existing national laws.

In case of introduction of new updates to any of their products, blockchain companies will have to report to the authority. Moreover, the companies must “accept social supervision.” According to CAC, any company that fails to adhere to these rules will be subject to prosecution and fines that range from 5,000 yuan to 30,000 yuan ($700 to $4,400).

Despite the introduction of the new rules on blockchain companies, China appears to tolerate the technology. This could be explained by the many uses of the distributed ledger technology outside the realm of virtual currency. CAS has also come forward to defend the new measures claiming they are good for the industry and will help to improve its standards.

Experts Views On The New Measures

When the news about the new regulations on blockchain companies first emerged a few months ago, there were those who supported the move while others criticized it. One of those who viewed the new laws positively is a Chinese Crypto expert called Mia Tam. He noted that the new regulations shouldn’t seem like a threat, especially among those giving honest views about the technology.

However, Jake Choi, CMO at Fantom was among the first industry players to criticize the move. He said that Cryptocurrencies were developed with the aim of decentralizing the monetary system and allowing users to transact while maintaining their privacy. The new regulations strip blockchain users their right to anonymity. Fantom is a smart contract platform that uses DAG.

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