China Wants to Avoid Blockchain Due to Transparency and Anti-Censorship Qualities
Keeping any type of behavior in the financial industry in China is highly frowned upon, and regulators are only becoming stricter. The Cyberspace Administration of China has decided to make it even harder to remain anonymous in any way, using blockchain technology as a guise for it.
The new laws will put requirements on the local blockchain companies, forcing them to have users register with national identification card numbers and their real names. However, the laws will not extend beyond China.
This regulator is responsible for helping to build “The Great Firewall of China,” but their new regulations will end up earning them more notoriety. The way that this decision came about was quite unique, considering that the proposal came after a 20-year old sexual assault case came up. An activist posted details about the case in a public and open letter, which was posted to multiple social media files like WeChat and Weibo.
This post quickly attracted censorship when someone anonymously posted the letter on the Ethereum blockchain as well, which is separate from the jurisdiction in China. Now, due to these actions, nearly everyone in the world has access to this letter of extremely sensitive nature.
There’s no way for China to control the Ethereum blockchain, because it instantly becomes immutable upon being recorded. However, this contradicts everything that the Chinese government aims to do – control the release of information.
The laws in China focus on the ability for their government to makeshift any new data in a way that will benefit their agenda. Ultimately, that just isn’t a part of the public blockchain’s features. With so many blockchain startups in China right now, the only real aspect for the government to concern themselves with is anonymity. There’re already rules that require real names to be used in many forums but the application of this type of identification isn’t applicable to immutable blockchains.
Before now, China has been tight-lipped about establishing any kind of framework regarding cryptocurrency or blockchain technology. Now that they are being more vocal about their stance against public chains and their anonymity, it’s possible that there will be some conflict with the International Organization for Standardization. A press release from NewsBTC said,
“The ISO/TC 307 Blockchain and Distributed Ledger Technologies commission, which conceptualized and is now running a global blockchain standard program with 39 participating and 13 observing countries, should find it difficult to come with an enterprise and public-interest framework when one of its PARTICIPATING members are against one of the core blockchain applications.”
Data privacy has been a concern for the democratic countries in the list before, so there’s a chance that their blockchain-inspired platform would be a little different from what China wants. Instead, it could end up being a censorship-enabled ledger, which is basically just a private database.
So far, there hasn’t been a law established for anti-blockchain anonymity. However, there’s a good change of the approval of such a law, based on the negativity that China has towards maintaining any semblance of privacy, especially regarding finances. The draft is to be expected by the end of next year.