China internet watchdog releases draft regulation for blockchain firms

By Staff Writer

China’s top internet watchdog, the Cyberspace Administration of China, has issued what looks like a draft to potentially regulate what it calls the blockchain-based information service providers on October 19.

The draft proposal, which is open for public consultation till November 2, contains 23 articles including, most notably, one that would make it compulsory for service providers to ask users to register using their real names, phone numbers and national ID card numbers.

All such entities would be required to register with the CAC within ten days of launching their platforms.

The new draft proposal is clearly aimed at containing the perceived risks that could arise from blockchain firms, given the anonymity these decentralized platforms afford its users.

Paradoxically, while Chinese authorities are keen on establishing a leadership position in all things blockchain, Beijing is uneasy about the power that blockchain could give its users in a system without central entities.

As per the draft regulations, the service providers would be required to censor content that is deemed to pose a threat to national security or to “disrupt the social order,” and to allow watchdogs to inspect user data stored on their systems.

The South China Morning Post reported that the regulations come in the wake of an incident in April when a Chinese activist has published details on blockchain platform of an alleged cover-up of a sex scandal at a university.

The latest proposal seems to highlight the conflicts between China’s highly censored media environment and one of the central attributes of blockchain as a technology, which is its immutable and tamper-proof nature.

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