China Adopts First-Ever Crypto Law

[Tomcat]

The law was passed by the NPC Standing Committee, Coindesk reports. This happened the day after Xi Jinping urged the country to use blockchain technology. The new regulatory framework aims to establish standards for the use of cryptography and password management. The law establishes the dominant role of a central cryptographic agency that will lead public cryptographic work and develop industry regulatory guidelines.

The law does not deal directly with cryptocurrencies, the text is rather focused on password management in government services and on cryptography. However, cryptography is a key component of cryptocurrencies. And experts believe that this is how the country is moving towards its national cryptocurrency.

The statement reads:
"Clear guidelines and rules are needed to evaluate commercial cryptography technologies used in areas of national interest, as the current 'free' system is no longer suitable for the industry."

The NPC said the new law will stimulate research in commercial cryptography and at the same time create an inclusive, standardized system of market regulation.

The adoption of the crypto law in China came a couple of days after Mark Zuckerberg failed to convince congressmen of the need to launch the Libra cryptocurrency. At this meeting, the head of Facebook noted that China began working on a national cryptocurrency project immediately after the announcement of Libra.