As crypto regulation calls intensify across the EU and the rest of the globe, China the world's second largest economy, has provided a regulatory lifeline for blockchain companies that wish to operate within the country.
According to a Reuters report, January 10, the Cyberspace Administration of China (CAC) set out the new guidelines at a meeting in Beijing and wants them to come into force as soon as next month.
Notably, the regulators stated in its new rule that among other things, blockchain companies would ensure that they, “implement real-name registration for users via a national ID or telephone number, censor content and store user data.”
Following these steps will give the Chinese authorities access to data provided by users on the company’s blockchain platform and also reduce any potential cases of anonymous transactions or other illegal activities.
As per the report, once the new rules become legally binding next month, companies that fail to reach regulatory compliance will get fined or prosecuted in some other way by the CAC.
Will China Rescind the Ban on Cryptocurrencies?
Although the new directive by the Chinese internet regulators focuses on blockchain companies, it was always going to call to mind the fact that the use of cryptocurrencies or setting up Initial Coin Offerings (ICOs) is banned in the country since 2017.
Providing regulations for blockchain startups is a positive signal that China will likely rescind its ban on cryptocurrencies sometime in the future and pursue the regulatory approach that has worked for countries such as Malta, Switzerland, and Belarus.
If China completes the turnaround, then they would be in the same category as India, another Asian nation that banned cryptocurrencies at the outset. India is already likely to legalize cryptocurrencies later this year, and it would, without doubt, be a landmark moment if China officially announces a decision to follow their pattern.
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