- Chinese users will use their official names for blockchain-based services.
- Individuals and institutions using blockchain technology using mobile apps or desktop sites will be included.
- Service providers to collect users’ mobile phone numbers and national identification numbers.
The Cyberspace Administration of China has published a new set of regulations that will affect Chinese blockchain startups. Henceforth, Chinese users will be forced to use their official names to use blockchain-based online information services.
First Set of Rules to Govern the DLT Industry
A report in the South China Morning Post says the new draft policy dubbed “The Regulation for Managing Blockchain Information Services” was published on Friday, October 19, 2018, and residents have until November 2, 2018, to give feedback before they take effect.
If enacted, the regulations will apply to any entity that is regarded as a blockchain information service provider doing business in China and will be the first set of rules ever to govern the country’s booming blockchain industry. The blockchain is the technology behind Bitcoin and other cryptocurrencies that are known for providing anonymity for users.
The Cyberspace Administration of China (CAC) defines blockchain information service providers in the draft policy as “entities or nodes” that offer information services to the public. This will mean therefore that individuals and institutions using blockchain technology using mobile apps or desktop sites will be included.
Part of the requirement from a total of 23 published articles in the proposed draft states that blockchain service providers will be required to register with CAC within 10 days after it beings offering products to the public. Similarly, the proposed draft policy orders that blockchain startups will be required to register names, service types, industry fields, and server addresses with CAC. The watchdog will make the information publicly available and will conduct annual reviews according to the draft.
KYC to be Made Mandatory
The draft also requires that blockchain information service providers strictly enforce know-your-customer regulation by collecting users’ mobile phone numbers and national identification numbers. The draft policy states in part:
“Service providers must store the logs and content published by users of their blockchain services for six months and provide this information to law enforcement when required.”
The CAC doesn’t draw a clear line as to exactly what type of blockchain startups fall under its definition but Chinese industry experts believe the new regulations will affect supernodes of particular blockchain networks.
The country put in place regulations requiring real-name registration for online services from social networking Apps in online discussion forums. Another set of rules published earlier this month allows security authorities to enter premises and companies offering internet services to inspect and copy data relevant to cybersecurity.