China Publishes Draft Of Blockchain Regulatory Guidelines
China’s principal Internet censorship office published a draft policy framework to standardize the country’s blockchain-related service providers. The Chinese Cyberspace Administration (CAC), the central government’s internet censor, distributed a rough copy Friday called the “Management of Blockchain Information Services Regulation” and is looking for public comment before it can be made effective.
If enacted, the regulation would apply to any firm or organization that is considered a blockchain information service provider functioning in China and would be one of the initial regulations overseeing the country’s blockchain industry. The CAC defines that blockchain data facility providers are “entities or nodes” that provide data services to the public – implying “both institutions and individuals” –using blockchain technology and through desktop sites or mobile apps.
The CAC requires blockchain service providers to enrol with the organization within 10 days of the start of offering products to the public as part of the total 23 articles suggested in the draft. The proposed plan instructs that blockchain startups should register their names, industry fields, service types, and server addresses with CAC. This information shall be available to the public and the CAC shall conduct annual reviews, together with the proposed policy.
Although the CAC does not make a clear statement on what types of blockchain start- ups should be included in its definition, some Chinese experts said that this regulation could have an impact on the super- knodes of certain blockchain networks. Jiang Zhuo’er, founder of the BTC .TOP mining pool, published his vision on policy design via a weekend Weibo post.
Jiang Zhuo’er said “For example, each of the 21 supernodes of the EOS network is operated by a company or an individual. As such, they must be fully compliant [with this regulation].”
Also notably, service providers under the proposed rules are not allowed to use blockchain technology to “produce, duplicate, publish, and disseminate” information or content that is prohibited by Chinese laws.
In addition, providers of block – chain services in certain highly regulated sectors of the country, such as news reporting, publishing, education and pharmaceuticals, must also obtain licences from the competent authorities before registering with the CAC. In particular, under the proposed rules, service providers may not use block – chain technology to “produce, duplicate, publish, and disseminate” information or content that is prohibited by Chinese laws.”
Notably, blockchain technology had been used to circumvent China’s internet censorship during the #Metoo movement and the latest pharmaceutical scandal in the country. In addition, the proposed draft requires that providers of block – chain information services enforce the “know-your-customer” identification code by recording the national identification numbers of users or their mobile phone numbers.
The draft policy further proposed that “Service providers must store the logs and content published by users of their blockchain services for six months and provide this information to law enforcement when required.”
Currently, the public will have until 2nd November to comment before the draft policy moves on to the next step.