China Imposes New Regulations on Blockchain Companies
The Chinese internet censorship agency recently confirmed that it had approved a new set of rules that are aimed to regulate blockchain services in the country. The new set of regulation is expected to take effect sometime next month.
The Cyberspace Administration of China, the country's internet censorship agency, recently published a new report entitled "Regulation for Managing Blockchain Information Services". The report defined blockchain information service providers as "entities or nodes." As such, these service providers are expected to provide information services to the public through blockchain technology which can be accessed on various platforms including mobile apps and desktop application.
The rules under this new regulation will take full effect on February 15. The document listed 23 articles, one of which requires blockchain service providers to have their businesses registered with the Cyberspace Administration of China. The document also stipulated that these companies should register within 10 working days after they start to offer their services to the public.
China's internet censorship agency also requires blockchain startups to register their names, services types, server addresses, and industrial fields. Additionally, the agency also bans startups from using blockchain technology in order to "produce, duplicate, publish, and disseminate" any content or information that are prohibited under Chinese laws.
If a blockchain startup fails to comply with these terms, the Cyberspace Administration of China will issue it with a first warning. Failure to act on that warning within the specified time will incur penalties ranging from 5,000 Yuan to 30,000 Yuan. The penalty is based on the degree of the offense.
The Cyberspace Administration of China first published this new regulation in October last year. During the time of its first publication, one of the articles recommended blockchain companies that are operating in fields like education, news reporting, publishing, and pharmaceutical industry to obtain all relevant licenses from their respective relevant authorities prior to applying for registration with the internet censorship agency. However, after months of deliberation, these particular rules were dropped in the final article altogether.
China is planning to impose these new blockchain rules in three regions - Beijing, Guangzhou, and China. The Asian superpower has yet to confirm or provide a timeline as to when it plans to roll out these new regulations in other regions.
As of this writing, China continues to uphold a ruling on domestic cryptocurrency trading. China has imposed a ban on crypto trading since 2018.