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China’s Congress has just passed a ‘cryptography law’ on Saturday that will be effective on January 1, 2020. According to the draft proposal, the new law is aimed at securing products, technologies or services information through the use of encryption and cryptography.
According to the Chinese national congress, the new law will also encourage the development of the commercial encryption industry, promote the development of other types of encryption, safeguard network and information security and protect data security rights of companies or people.
This announcement came right after the Chinese President Xi Jinping said that China should take advantage of the blockchain technology and its applications. Xi stated that the technology offers a wide range of applications and that they should focus on a few technologies and accelerate the development of blockchain technology.
These two announcements seem to have affected Bitcoin as the digital currency just experienced a huge bull move, breaking above $10,000, although it’s currently trading around $9,200.
Nonetheless, cryptocurrency trading is still banned in China and the new law doesn’t even mention cryptocurrencies, however, this new law and the following regulations will clearly have an effect on cryptos as cryptography is the underlying technology they use.
China’s Central Bank has recently announced its plans to launch a digital currency. The central bank digital currency (CBDC) could become the world’s first cryptocurrency created by a central bank.
Changpeng Zhao, CEO of Binance, the world’s largest cryptocurrency exchange, has tweeted about the new China Law stating that their government took a big step in the right direction.
This is big!
The country with the biggest population on Earth, and one of the highest GDP growth in recent years, just took a big step in the right direction.
What is your country gonna do? Follow or get left behind? https://t.co/yoOVlOMuL9
— CZ Binance (@cz_binance) October 26, 2019
Zhao also mentioned that the fast adoption by China may be catalyzed by Libra, a digital currency currently being built by Facebook. Zhao states that all of this will help cryptos in general and that we might need to thank Zuckerberg, the founder of Facebook for it.
The new law will certainly encourage other countries to do the same and adapt to this new blockchain era. Zhao ended the tweet with a question for other governments:
“What is your country gonna do? Follow or get left behind?”
Nermeen Nabil Khear