The Standing Committee of China’s 13th National People’s Congress passed a new cryptography law on Saturday, in a move that some observers see as necessary preparation for the country’s eventual launch of its own digital currency. According to Chinese state media, the new law will go into effect on January 1, 2020, Reuters reports.
China’s cryptography law, which takes effect on Jan. 1, is aimed at “facilitating the development of the cryptography business and ensuring the security of cyberspace and information”, the official Xinhua news agency said, citing parliament. The law states that the state encourages and supports the research and application of science and technology in cryptography and ensures confidentiality.
Though the law makes no direct mention of digital currency, its focus on legal issues related to cryptography and the designation of a centralized agency to manage public cryptographic efforts will almost certainly have broad implications for cryptocurrency throughout China.
On Twitter, Primitive Ventures founding partner Dovey Wan reviewed the draft text of the new law and concluded that China is building the foundation for its own digital currency launch in late 2019 or early 2020:
“The key take away is - the developing of new cryptography, hashing algo, even the usage of the tech, will be in the official legal realm This means you need to follow the CCP standard for all "encrypted" behaviors, which can be VERY broad, from mining to block propagation.
AGAIN, all of these I think is building narratives, gaining mindshare, pushing out the political and legal foundation for the upcoming digital RMB, which will roll out by the end of this year or early next year.
THE RACE IS ON”