China Enacts Crypto Law in Run-Up to State Digital Currency Debut
Rules governing crypto password storage aim to prepare the economy for the arrival of the world’s first central bank digital currency, currently in testing.
China has formally implemented a law governing cryptographic password management as part of its pre-release plans for its central bank digital currency (CBDC).
As English-language news media outlet China Money Network reported on Jan. 1, the latest regulations have become legally binding following their unveiling in October last year.
Crypto security paves way for CBDC
As Cointelegraph reported, the Standing Committee of the 13th National People's Congress in China passed the crypto law on Oct. 26. It divides passwords at large into three distinct categories — passwords, common passwords, and commercial passwords — and aims to facilitate China’s transition to blockchain technology:
“In order to prevent data from being tampered with, it is necessary to protect each data with a password. The development of blockchain technology can not be separated from the progress of cryptography technology,” China Money Network wrote referencing a report from Japanese media outlet Japan Economic News.
The central bank’s tests are ongoing
China has not yet set a formal release date for its CBDC, which will be the first state-backed cryptocurrency on the world stage.
Beijing’s sudden public praise of blockchain more broadly sparked a wave of enthusiasm that ricocheted across cryptocurrency markets. Bitcoin (BTC) rose, while China-based altcoins delivered considerable growth over a short period.
Cointelegraph published a retrospective on China’s cryptocurrency policy this weekend.