The Cyberspace Administration of China revealed through its website a document that lays out the regulatory framework for the management of information services based on blockchain technology within China. The new regulations will become effective on February 13th, with the sole purpose of preserving the interests of both citizens and companies that wish to engage with such services, while also establishing the sanctions applied when committing the described infractions.
According to the document, the providers of information through blockchain will need to improve their management systems, adding (among other things) an efficient registry of users, a good revision method for the data obtained in each transaction and a response mechanism in case of emergencies, such as a security breach. The providers of information services through blockchain will have to register and comply with the central censorship laws and regulations for the internet, notify the government of the development of new products, new applications or functionalities of the service they’re providing and apply sanctions to any user that does not comply with the defined regulations.
The Offices for Internet Information Management that are set both locally and nationally will be the ones in charge of monitoring the service providers. Their main goal will be to supervise the work carried out by the service providers and help them with the improvement of their services, promote the credit system to encourage growth, promote the improvement and quality of the personnel and to control the development of the blockchain industry in a fair manner. The control offices will perform constant inspections to ensure that the service providers are compliant with the law.
If a service provider violates any disposition set up by the new regulatory framework, it could face fines, warnings and even the intervention of the company by the government.
It appears that China is finally warming up to blockchain technology, providing a detailed regulatory framework for the industry in the country. Although the country still considers ICOs as mainly illegal due to the high risk they represent, the government seems to be encouraging new technological developments in the blockchain sector. It all points out to potential growth in the sector for 2019.