Regulations

China’s Internet Information Office Releases Draft On Regulations For Blockchain Startups

China’s Internet Information Office Releases Draft On Regulations For Blockchain Startups

In order to promote the healthy and orderly development of blockchain startups, regulations have been formulated in a draft which is now opened for comments, according to recent news.

China’s top-level internet censorship agency has created a draft where they state their plans to regulate blockchain-related service providers in the country. The cyberspace Administration of China (CAC) released the draft on Friday and is now looking for the public’s feedback before making final statements.

By looking at the attachment and the details of the proposal, it becomes clear that CAC defines blockchain information service providers as “entities or nodes” that offer information services to the public, both institutions and individuals, using blockchain technology via different medias such as desktop sites or mobile apps.

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The proposal, if enforced, would represent one of the country’s first regulatory frameworks for the blockchain industry. The proposal states that blockchain startups must register their names, service types, industry fields and server addresses with the CAC. This information would become publicly available, and the CAC would review the information yearly.   

Blockchain service providers that work in certain highly regulated fields must apply to several other rules as well. These fields will include news reporting, publishing, education and the pharmaceutical industry and they need to obtain licenses from relevant authorities before registration with the CAC. Furthermore, service providers would not be allowed to use blockchain technology to produce or duplicate information or content that is prohibited by Chinese laws.

China has always been a hot topic when it comes to cryptocurrencies and a few weeks ago, Toshi Times covered a story where researches stated that China could destroy Bitcoin. The reasoning behind the statement was because many of the major mining pools for Bitcoin are located in China, and the Chinese government could potentially take control of those and damage the network.

Many major companies in China are trying to implement blockchain into their businesses, and the internet Giant Baidu revealed a super blockchain a few months ago. Baidu is the Chinese equivalent of Google, which has been in the limelight for being one of prosperous IT companies originating from China. The new solution by Baidu is called ‘Super Chain’ and is compatible with Bitcoin and Ethereum mining operations. It inserts and removes consensus mechanisms to solve the energy consumption problem and also helps the single-chain support of 100,000 transactions per second.

Even though there are a lot of restrictions in the proposal, it is a major step forward for blockchain technology in China to get some regulations around the subject, and as the examples prove. A lot of things are happening in China when it comes to the evolution of blockchain.

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