Opinions

Blockchain In Chains: China To Start Regulating Blockchain Firms

Blockchain technology might’ve been successful in grabbing the attention of several countries across the globe, but the countries, despite their interest in the new technology, have been hesitant when it comes to actually implementing it. That is without regulations. And interestingly enough, the general perception of regulation has been rather negative among the blockchain community.

However, most of the countries that have projected any interest in the technology, have called certain regulations necessary, if there is to be any future with blockchain. China is one of the countries on the list, that has already approved regulations for the blockchain related activities in the country.

According to reports, China’s Internet censorship agency has ratified a certain set of regulations for all the blockchain service providers in the country. And this will be officially implemented on the 15th of February. The new “Regulation for Managing Blockchain Information Services”, was published by the Cyberspace Administration of China (CAC) on Thursday. According to which, blockchain information service providers are defined as “entities or nodes”, that are responsible for providing the public with information services through blockchain, via desktop site and even mobile apps.

The document further contains 23 articles and among those, one article has set out the requirement for blockchain service providers to register with the CAC. And this has to be done within 10 working days of starting to offer services to the public. Moreover the agency also requires for all the blockchain startups to register the following,

  • Names
  • Service types
  • Industry fields
  • Server addresses

In addition to that, it also forbids startups from using the blockchain technology for the purpose of producing, duplicating, publishing or disseminating any information or content that is prohibited under the Chinese laws.

In case of failure to comply with these regulations, the CAC would first issue a fair warning. And if any startup fails to act within the given timeline even then, then the CAC will serve them with a fine ranging from 5,000 yuan ($737) to 30,000 yuan ($4,422). The amount of the fine depends on the severity of the offense.

The first draft of these rules was actually published back in October of 2018 by the CAC. At that time, the draft contained an article which also suggested that blockchain startups operating in fields such as news reporting, publishing, education and the pharmaceutical industry, in addition to obtaining a license from the CAC, must also obtain licenses from relevant authorities.

China has had a rather uneventful relation with the blockchain technology. Earlier the technology had been used to bypass China’s strict Internet censorship – often referred as “The Great Firewall.” So the country’s hesitation when it comes to the technology isn’t really baseless.

For further details, stay tuned to BlockPublisher.

Abeer Anwaar

Abeer holds a Bachelors degree in Media studies and covers blockchain startups for BlockPublisher. An optimist, excels in the art of the written word and swears by the joy of all things sweet. Contact the editor at editor.startups@blockpublisher.com

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