The Chinese government seems to be taking further steps to control its population. Authorities are pressing blockchain companies to censor content, store users’ private data such as identity and share this information with the local government. The main intention behind it is to support ‘orderly development.’
The Cyberspace Administration of China (CAC) is pressing users of blockchain platforms to submit their real names and be compliant with strict know-your-customer (KYC) procedures. In a report released on January 10, Reuters says that the CAC will require users to provide national ID or their telephone number. Those companies that do not follow these rules could be subject to fines or prosecution.
Although the intention is to regulate the market and keep it under its control, the government encourages companies to keep investing in distributed ledger technology (DLT). China has been an important player in the blockchain market. Back in 2017, China was the most active filer of blockchain patent applications in the world.
Back in September 2017, the Chinese government imposed a ban on cryptocurrencies and Initial Coin Offerings (ICOs). The Chinese Yuan was one of the most traded fiat currencies against Bitcoin. Now, they represent less than 1% of the total Bitcoin transaction volume according to some reports.
Clearly, China is taking measures that are against the Bitcoin, blockchain and crypto ethos. In the future, companies in China would face the consequences of being highly regulated. Users would search companies that protect their privacy and handle their information seriously rather than giving all the data to regulators.
China has several companies that are developing different blockchain networks and solutions. In the future, new firms that want to enter the space might be persuaded and find a more blockchain-friendly country for their investments.