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It seems like China is finally ready to take the bull by the horn. Instead of running away from the emerging technology and missing out on all it has to offer, the government of China has devised a safe means to leverage its untold potential, without necessarily getting burnt.
Impossible, you may say. However, the people of China are ready to take the high road and strongly regulate the crypto ecosystem to reduce avenues for crime to the lowest possible level.
In the spirit of getting on board, the Standing Committee of the 13th National People’s Congress in China on Saturday passed the official cryptography law, targeted at regulating the use of cryptographic keys on the blockchain and the management of passwords.
The cryptography law, which is slated to take effect from Jan 1, 2020, argues that “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.”
In line with the new regulatory standard, crypto users may not enjoy the total freedom the digital currency set out to achieve. With this law in place, citizens of China who dabble in crypto or blockchain will be closely monitored by a central cryptographic agency, appointed by the government. This agency is saddled with the responsibility of ensuring that the general public adheres to the guidelines and policies set for the China crypto ecosystem.
Although China’s government is yet to reinstate crypto trading, cryptographic keys and passwords stated in the new law extend beyond other blockchain-enabled applications to the crypto world. In fact, it is a critical factor underpinning cryptocurrencies such as Bitcoin(BTC)trade.
Reinstating Crypto Trading or Setting the Ground for Native Cryptocurrency?
Will this eliminate the fear of the government and consequently facilitate a wider acceptance of crypto trading? We can’t say yet. What we can say, though, is that this news came barely a day after China’s President Xi Jinping gave his blessings to blockchain technology and encouraged the people of China to explore how the technology could grow the economy (and possibly initiated a broad cryptocurrency rally). You wouldn’t be so far from the truth if you said crypto trading may be brought back to the table soon.
Another angle of dissection would be that the government is setting the base for its own central virtual currency. While there is no exact date of launch or recent update on China’s native digital currency project, we do believe the passing of this law is part of the groundwork for the release of the virtual coin. Therefore, it may not necessarily be that the government is considering opening the crypto market again.
Whatever be the case, you can count on us to bring you the latest crypto news and updates as they hit the scene.