Data Backup Digest

China has made a lot of news lately on the topic of cryptocurrency and blockchain technology; and for all the wrong reasons. With accusations of state-sponsored hacking as well as a recent hest of nearly $90 million USD in Bitcoin and Ethereum, much of the news coming from the country hasn't been good. However, that might be about to change due to a new cryptography law that is set to take effect on January 1, 2020.

The Blockchain Meets Politics

Xi Jinping, current President of the People's Republic of China as well as the General Secretary of the Community Party of China, was recently quoted as saying the country needs to "seize the opportunity" provided by blockchain technology.

The official proposal reads, in part: "Clear guidelines and regulations are needed to evaluate commercial cryptography technologies used in the major fields related to the national interest as the current ‘loose’ system is not suitable for the industry anymore."

In addition, Jinping was quoted as saying: "We must take the blockchain as an important breakthrough for independent innovation of core technologies. [We must] clarify the main direction, increase investment, focus on a number of key core technologies, and accelerate the development of blockchain technology and industrial innovation."

Jinping also mentioned the importance of laws and standards regarding future blockchain applications. He has specifically called for strict regulations over blockchain technologies, including cryptocurrency, as well as significant investments into training programs and innovation teams.

Finally, his speech also talked about the development of Blockchain+; a brand new development that could be used in areas like education, employment, and public health. Although few details have been unveiled, Blockchain+ could be a tremendous step forward for the country, cryptocurrencies, and blockchain technologies as a whole.

It's important to understand that cryptocurrency, including Bitcoin, are currently banned in China. This is primarily due to a 2017 decision made by the People's Bank of China. However, a digital renminbi platform is currently in development and is expected to launch very soon.

A Bridge Over Troubled Waters

However, the fact that digital coinage is currently prohibited in the country hasn't prevented cybercrimes involving cryptocurrency. A recent report, published by CoinTelegraph and FireEye in August 2019, links Chinese hackers with sources located throughout the country's government.

Prior to that, three Chinese suspects were identified and accused of stealing approximately 600 million yuan, equating to $87 million in U.S. dollars, worth of Bitcoin and Ethereum in the country's biggest cryptocurrency heist to date. It was a highly sophisticated attack that ultimately affect many different systems and multiple victims.

With incidents like this in mind, it's easy to see why many experts are suspicious of China's recent embrace of the blockchain. It's unclear if this is a real effort to utilize cryptocurrency and blockchain technology for a legitimate purpose or if it's just a superficial attempt at restoring the country's public image, but it is a step in the right direction. If nothing else, the new laws and regulations should make it harder for Chinese hackers to target innocent victims in their own country and around the globe.