Chinese Transparency Mania Touches Blockchain
Main page Analytics, China, Regulations
Hot topic
Oct. 24, 2018
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Chinese Cyberspace Administration, the country’s Internet regulator, has developed a new set of rules which deprives the anonymity of blockchain-based services.

The document requires the users of such services to provide their real names and national identification card numbers during the registration process.

The new regulations are open to public comment until November 2, but it is unclear when they take effect. However, it seems obvious with the current situation in the country that official Beijing will most likely not modify these rules in any way.

The proposed regulatory framework includes 23 paragraphs and requires blockchain service providers to register with the Cyberspace Authority within 10 days upon the start of providing their products to the public. During the registration procedure, it is required to provide the name of the enterprise, type of services, and the company’s profile along with the server addresses. Users who violate the law will be warned, and their accounts may be blocked.

“The blockchain information service provider shall record the content and log information of the blockchain information service users, and the record backup shall be kept for six months, and shall be provided when the relevant law enforcement department inquires according to law", the 14th paragraph of the new regulations says.

Blockchain service providers will also have to comply with the Chinese law as they will not be allowed to use the blockchain technology to "produce, duplicate, publish and distribute" information or content prohibited in China. This item was added due to the fact that some companies resort to using the distributed ledger technology (DLT) to circumvent the censorship introduced in the country.

Similar regulations have already become practice for some financial services. China’s analog of PayPal, WeChat Pay, requires its users to register with a national ID or a bank card in order to conduct transactions that are more than approximately $144.

China Tightening Clampdown on Cryptocurrencies

The new move of the Chinese watchdog is no surprise no matter how sad it is. The People’s Republic of China has for a long time been fighting with cryptocurrency trading and any mention of it. However, the country approaches the technology behind crypto in a mostly positive way.

However, later on, the authorities decided to take a closer look at the possibility of launching their own crypto — a Yuan-Backed Stablecoin. They remain convinced that the development of a USD-pegged cryptocurrency strengthens the role of the U.S. dollar in the global monetary system while also having a negative impact on other fiat currencies.

At the beginning of September, it became known that Chinese traders managed to find a way to avoid bans and reach out to crypto markets.

These rules appeared after a Chinese activist in April published an open letter about the alleged cover-up for sexual harassment at the university. An anonymous message has been attached to a transaction and is still readable. It is impossible to delete this information from the network due to the immutability of the blockchain system.

Blockchain is like a bulletin board. Any user can post information on it, but you cannot change, move or hide it in a far corner, where no one will see this “ad”. And for the Chinese government, this is unacceptable. After all, the censors must clean up everything that is unpleasant. Well, if you can not erase the information, then you need to know who published it.

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