China Accelerates Blockchain Growth
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China’s national parliament has passed a new law on cryptography aimed to facilitate development concurrently with the country’s central banking efforts to launch its own digital currency.
The newly adopted law, effective as of January 1, 2020, «was necessary for regulating the utilization and management of cryptography, facilitating the development of the cryptography business and ensuring the security of cyberspace and information», the National People’s Congress Constitution and Law Committee.
The new law distinguishes cryptography into three classifications: core, common and commercial. Core and common cryptography will be strictly managed by Chinese authorities and used to protect confidential national information.
If cryptography is deemed as commercial, which assumes no risk to state security or the public interest, cryptography management departments and other relevant personnel are unable to ask for disclosure of «exclusive information related to the cryptography such as source codes and must keep the business secrets and privacy they get in their duties strictly confidential.
The new law marks a further acceleration of China’s blockchain-related policy which is likely to pave the way to various initiatives including the nation’s efforts to launch its own digital currency which its central bank claims is almost ready.
The law was also enacted one day after President Xi Jinping called for more research and investments into blockchain technology, stressing competition from other major countries and the need for China to obtain first-mover to increase «influence and rule-making power in the global arena».
Questions & Answers
Q.What is the primary purpose of China's new cryptography law?
What is the primary purpose of China's new cryptography law?
The law aims to regulate cryptography's use and management, support the cryptography business's development, and ensure cybersecurity and information security. It also supports the country's central banking efforts to launch its own digital currency.
Q.When does this new cryptography law come into effect?
When does this new cryptography law come into effect?
The newly adopted law, which introduces classifications for cryptography and specific management rules, will become effective as of January 1, 2020. This timing follows recent calls for increased blockchain investment.
Q.How will commercial cryptography be treated under the new law?
How will commercial cryptography be treated under the new law?
Commercial cryptography, deemed not to risk state security or public interest, is protected. Management departments cannot demand disclosure of exclusive information like source codes and must keep business secrets and privacy confidential.
Q.What prompted the timing of this new law's enactment?
What prompted the timing of this new law's enactment?
The law was enacted shortly after President Xi Jinping urged more research and investment into blockchain technology. He stressed the need for China to gain first-mover advantage and increase its global influence.
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