China is coming down hard on blockchain companies, even though the government appears to favor blockchain over cryptocurrency. The Cyberspace Administration of China (CAC) announced new regulations on Jan. 10 that will compel blockchain platforms to eliminate “undesirable” content while giving authorities access to private stored data and to check the identity of users.
‘Rules to Promote Healthy Development of Blockchain Industry’
China’s Internet Information Service Management Measures, which come into force on February 15, will “promote the healthy development of blockchain technology and related services,” CAC claimed in a press release. It said the rules are built to “safeguard national security and social public interests, [and] protect the legitimate rights and interests of citizens.”
China has clamped down on virtual currencies since 2017 when the government outlawed initial coin offerings and prevented domestic cryptocurrency exchanges from operating within the Asian country’s economy.
But its government appears to tolerate distributed ledger technology on account of its many uses outside of the cryptocurrency realm. Industries such as oil, shipping, and agriculture are starting to show interest in blockchain, the technology which underpins crypto assets like bitcoin.
Stringent Registration Requirements for Users
Blockchain companies will now be required to register users with their actual names and national identity or mobile number while eliminating content that Beijing deems unfavorable. Companies are expected to “immediately release” stored data that the state regards as a threat to or contravening existing national laws. The new regulations state:
The blockchain information service provider shall implement the responsibility for information content security management, and establish and improve management systems such as user registration,