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China releases strict regulations for blockchain service providers

Cyberspace Administration of China

The Cyberspace Administration of China (CAC) has announced new regulations for the companies managing blockchain technology in the country.

CAC, also called Office of the Central Cyberspace Affairs Commission, is the central agency for the People’s Republic of China that handles internet regulation and censorship in the country.

The new regulations were proposed in October as a draft. Zhuang Rongwen, Director of CAC, said “The Regulations on the Management of Blockchain Information Services has been reviewed and approved by the Office of the Internet Information Office of the State Council and is hereby promulgated and will be implemented as of February 15, 2019.”

These regulations are expected to advance the healthy and orderly development of the industry.

Under the regulation, the companies that provide blockchain services will need to register with CAC within a duration of ten day before providing the services to customers.

Blockchain service providers must provision the services to public via internet sites and applications which are based on blockchain technology or systems.

The State Internet Information Office of China will take the responsibility of supervision and management of the national blockchain information service.

The blockchain information service providers will also need to take care of the information content security management, establish and improve management systems like user registration, information review, emergency response, and security protection.

Further, the companies shall have the necessary technical conditions and immediate response capabilities in place related to their services.

Further, the companies will need to conduct real identity information on the basis of organizational code, identity card number or mobile number for the users. If a user doesn’t perform real identity authentication, the service provider shouldn’t offer the related services.

Also read: Reliance executes first-ever blockchain-enabled trade finance transaction

The service providers which are found violating the regulations will be fined according to the article. The fine will range between 5000 yuan to 30,000 yuan ($741 to $4450). As mentioned above, the new regulations will become effective on 15th February, 2019.

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