The entire cryptocommunity received a jolt this weekend after the standing committee of the 13th National People's Congress in China announced the signing of a new cryptography law. The new law focusses on expanding the standardization of cryptography in the business sector. China now appears ready to go all-in on blockchain technology.
News of the decision came via an official press release on Saturday 26, 2019. According to the release, the new bill has four main points of focus. The first area of concern is standardizing the application and management of passwords.
China – Standardization
Standardization is a key component to further development in a sector. Think of how the USB port simplified computer hardware development. China seeks a similar strategy with its crypto aspirations. Standardization is the first step in mass innovation. It allows firms to focus on new features rather than compatibility concerns.
China understands that in order for the country to excel in cryptography, they need to create some form of standardization. This will help local businesses get the most innovation out of their R&D.
The second point of concern listed is promoting the development of the password business sector. Cryptography is an essential part of commerce. Now China seeks to expand its national capabilities by spurring further startup development across the marketplace. In order to accomplish this task, Chinese officials propose a new blockchain education initiative.
Securing Network Information
Additionally, the bill lists ensuring network and information security, and improving the scientific, standardized, and legalized level of password management as a key component to the country's new strategy.
The original draft of the bill was put forth in July. At that time, government officials sought to get commentary from the business sector on what aspects of the bill should remain, and what needs to change. Specifically, regulators debated on the verification process for businesses that use blockchain.
Basically, officials were unsure of whether or not every business should have to register their blockchain strategy with regulators, or would registration be only during certain use cases. Additionally, regulators wanted to know how closely they should match other international blockchain regulations currently in development.
Happy Blockchain New Year
The new bill goes into effect on January 1, 2020. Notably, the news boosted the cryptocommunity as you would expect. Bitcoin experienced double-digit gains followed by the rest of the market.
Ironically, crypto exchanges are banned still on the Chinese mainland. Officials banned trading platforms during the 2017 Chinese crypto crackdown which saw the government actively take an anti-crypto stance.
China Seeks to Be a Blockchain Force
Today it looks as though regulators did some more research and decided it was much smarter to encourage blockchain tech development, rather than falling behind in this critical emerging field.
Now that China is back in the crypto sphere, the market is ready to grow to new heights. Importantly, China's pivot could create a new blockchain race between superpowers seeking to gain the upper hand in cryptography. For now, the market is happy to see China opening up to blockchain.