On the Heels of President Xi Jinping’s study session on Blockchain and his announcement on the urgency for China to embrace the technological evolution that is taking place; the 13th National People's Congress in China has passed a new cryptography law which comes into effect on the 1st of January, 2020.
"Clear guidelines and regulations are needed to evaluate commercial cryptography technologies used in the major fields related to the national interest as the current 'loose' system is not suitable for the industry anymore."
Paul Moynan, Dragon CEO welcomes the measures saying; "once again we see China taking the lead to drive forward Blockchain adoption, and we are seeing an integral role in the development of the Chinese economy embracing Blockchain. I expect the rest of the world to be watching closely before following Chinas lead once the regulations become active next year."
The new regulations for cryptography address topics such as how compatible the industry standard should be compared to other international systems as well as whether companies should voluntarily verify their commercial use-cases with Chinese authorities. The regulations will help lay the foundation for the development of new and existing blockchain technologies. The new law aims to inspire more R&D on technologies that are already utilizing cryptography while at the same time strengthening a comprehensive regulatory system for the whole market, as well as confronting evolving regulatory, and legal uncertainty in the commercial use cases of cryptography.
The law states that codes will be categorized into two fields; Core and Common codes, which will be solely handled by the State, and Commercial Codes, which will be utilized by the commercial sector to be developed and applied for profit. Most importantly, and a relief to many, the law specifies that all business entities, as well as foreign-funded enterprises, are to be treated equally in the "Study, Development, Production, Sales, Services and Trade" of commercial codes.
The Chinese Congress is planning a nationwide educational effort, ranging from public exhibitions promoting cryptography among companies, schools, social groups and government officials. It is safe to say that the blockchain space and the cryptography that comes with it, is in for a wild ride come the New Year.
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