The cryptocurrency space in China is on the fast trail to make things become regular for the country’s economy. In 2020, the nation’s newly drafted crypto law takes effect on January 1. It seems that this new law is part of China’s larger blockchain push, and is laying the groundwork for the type China’s new digital currency.
The Chinese have enacted these laws to primarily implement the cryptographic process on a much larger scale in their economy. This will regularize the blockchain space much more effectively.
The law focuses on regulating cryptography, enhancing cybersecurity, and facilitating digital assets and businesses. Because cryptographic algorithms are open source, the Chinese government clearly calculated that trying to control the technology is more practical than trying to prevent its spread.
Americans have long understood the power of both cryptography and surveillance. For many years, the United States imposed strict regulations on crypto exports. The situation is similar in other Western powers. Both the UK and Australia have passed their own oversight bills over the past half-decade.
If China wants to take the lead in the global intelligence race, it must legislate the code and use similar surveillance to deal with potential threats to national security.
China new cryptography could serve as the first step towards the regulation of blockchain technology, although China has never claimed support for assets like Bitcoin and Ethereum. However, the law does not explicitly mention Blockchain but rather initiates the management of cryptographic technology.
Other than the RSA encryption used by blockchains, the common national coding standards mainly include SM1, SM2, SM3 and SM4. The most popular blockchains currently, like Bitcoin and Ethereum, do not meet this requirement.
China’s law on cryptography came into effect
On October 26, 2019 – China’s leading legislature voted to pass a national code law. Lawmakers approved the law at the closing meeting of a bimonthly session of the Standing Committee of the National People’s Congress (NPC), after a second review.
The enactment of the law is necessary to regulate the use and management of cryptography, facilitate the development of crypto business and ensure cyberspace and information security.
By law, the state encourages and supports scientific and technological research and application in cryptography and protects intellectual property rights in cryptography. The law emphasizes the training of cryptographic talent and states that those who have made outstanding contributions to cryptographic work can be awarded.
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