A New Cryptography Framework For Regulation Purposes Has Been Approved By The Chinese Government

China, which is worldwide known for its strict attitude towards crypto, voted in favor of a new crypto regulatory framework. This happens in times when the People`s Bank Of China (PBOC) are on the verge of releasing their yuan-backed cryptocurrency project.

The regulatory framework will be in force from 1st January 2020. The positive vote on the framework was coupled by a significant amount of skepticism. It is believed that the framework could be deployed as a “manipulation” tool, as permissions could be granted to those who are part of China`s leading government party. 

“Updating the law was a mandatory task due to the need of regulating the use of cryptography tools, enabling crypto-related business, and securing cyberspace and the information on it,” the Chinese parliament stated, according to Xinhua.

China’s idea of utilizing a digital currency dates back to 2014. The preliminary plan was to reduce the costs associated with using fiat cash. PBoC’s digital currency is also having similarities with Facebook’s Libra project – the opportunity to be cross-platform, utilizing WeChat and AliPay as payment providers.

The race for technical hegemony between China and the United States really sets in, as Facebook’s CEO Mark Zuckerberg warned the Congress about China’s plans. According to Zuckerberg, the United States is exposed to a real risk of falling behind China in the crypto race, especially with China’s new crypto regulations.

Libra, however, is still at the crosshairs of regulators. The controversial project gathered a lot of criticism about the impact of the project on the global economy in recent months. Zuckerberg even agreed to postpone the launch of its stablecoin project. China on the other hand is taking advantage of the delay to progress with the release of their cryptocurrency.

China is almost ready for the crypto world, as last week China’s President Xi Jinping stated that the country must aid and boost the development of both software and hardware blockchain solutions. The statement received people`s approval, despite China’s foreign exchange regulator officials stating that without proper regulations, the crypto space would become a target for illicit activities.

China is also making a progress with the number of filed patents. Currently there are 506 blockchain companies that submitted patent requests.

The global crypto market received a fresh wave of trading volumes, as Bitcoin’s price increased with 22 percent shortly after Jinping’s announcement. Ethereum followed the trend, marking a near 10% increase from last week.

Tether, dubbed as “the gateway to Bitcoin,” showed increased amounts of trading activity, marking a monthly high of $4,12 billion.

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