China has passed the first-ever law aimed at regulating cryptography and password management. The Standing Committee of the 13th National People’s Congress in China has passed the law on October 26 and will take effect on January 1, 2020, according to the local news outlet CCTV.
As stated in the announcement:

“The cryptographic law aims to regulate the application and management of cryptography, promote the development of cryptography, ensure network and information security, and enhance the level of scientific, standardized, and legalized cryptography management. It is a comprehensive and basic law in the field of cryptography in my country.”

Cryptocurrency regulations
The newly adopted cryptographic law aims to set standards for the application of cryptography and the management of passwords. It also establishes the role of a central cryptographic agency meant to lead public cryptographic work that creates guidelines and policies for the industry.
The law does not specifically mention cryptocurrency, but it focuses on cryptography, a key component of cryptocurrencies like Bitcoin.

China’s national cryptocurrency
The law is building the foundation for the upcoming Chinese national cryptocurrency and the adoption of blockchain technologies. The digital yuan will be a centralised currency, issued first by China’s central bank, the People’s Bank of China (PBOC) to local commercial banks, then to users for circulation.
As stated in the announcement:

“In addition, the Cryptography Law stipulates that the state strengthens the training of cryptographic talents and team building, and commends and rewards organizations and individuals that have made outstanding contributions to cryptographic work in accordance with relevant state regulations.”

China is taking the lead in creating the e-yuan most likely due to concerns about Bitcoin and Facebook’s Libra.


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