Following Chinese President Xi Jinping's call for the country to seize opportunities involving blockchain technology, a new law had just been passed to accelerate China's foray into the blockchain space.
On Saturday, China's Standing Committee of the 13th National People's Congress passed a new cryptography law that it stated will take effect on January 1st next year.
The passing of the new law comes just a day after Xi's call for the country to take advantage of the technology. While China still outright bans the trading of cryptocurrency, the new law is intended to develop the digital currency's underlying technology.
China is also still placing its planned national digital currency on hold as it tries to first develop an infrastructure to support it.
The newly passed cryptography law will essentially try to tackle the different issues of commercial blockchain applications. This will include the development of regulatory standards and legal infrastructure to avoid any unwanted use or abuse of the technology.
The country is seeing a growing use of blockchain technology in various industries and the passed law will likely play a vital role in its continued development.
According to the latest draft proposal of the law prior to its approval, the current "loose" system that regulates the use of commercial cryptography technologies needs to be addressed.
The law intends to establish clear guidelines and regulations on the technology, which is seeing an increased role in major industries and the economy as a whole.
The National People's Congress hopes that the new law will encourage research and development into the emerging technology under the guidance of government regulations.
As blockchain technology develops, applicable rules and regulations will be established until a standardized regulatory system for the market can be built.
The Chinese congress also intends to launch or facilitate the establishment of nationwide educational efforts to inform the public of the intricacies of the new technology and its possible uses. This will include the launch of public exhibitions and the pushing of blockchain technology to government offices, social groups, and corporations.
The draft proposal for the cryptography law was originally submitted in July. It was made available to the public for comments and suggestions. The original draft included a variety of sections that dealt with various issues pertaining to the emerging blockchain technology.
This includes addressing the compatibility issue of industry standards with international cryptography systems. The draft also proposed that companies remain transparent of their use of the emerging technology, including the reporting of use-cases to authorities or regulators.
