China has launched new regulations on blockchain and BaaS, and Internet governance methods will apply to blockchain industry

According to the new regulatory framework issued by the Cyberspace Administration of China (CAC) on January 10th, the Chinese government will implement strong supervision of all BaaS companies.

As stated in the new regulations, all companies that provide blockchain and BaaS anyway must:

1. Obtain an Internet Content Provider (ICP) certification from CAC, register its server IP and server location or provider.
2. The blockchain solution for 2B or 2C services provided by all companies must be reported to the local regulatory affairs office within 20 working days of the new regulations becoming effective.
3. The local regulatory office has the authority to review all blockchains and BaaS ledgers and data, and the company must provide at least 6 months of ledgers and data from its servers.
4. All blockchains and BaaS service companies must report their legal representative information, including name, nationality, place of residence and mobile number.
5. All customers or agencies served by blockchain or BaaS providers must provide their ID, real-name information, and local regulators have the right to request such information from blockchain or BaaS providers. If not, the service provider will be ordered to stop the service and make corrections.
6. All blockchains and BaaS providers are not allowed to create, play, reproduce, and publish any information prohibited by relevant Chinese laws and regulations. If the offender constitutes a crime, he shall be investigated for criminal responsibility according to law.

From the new regulation, we can easily understand that:

1. According to the new regulations, public chains will be unusable, and the Chinese government still believes that the consortium chain serves the centralized company is the right way to use blockchain, and it is a trend to be safely regulated.
2. Anonymous coins and encryption algorithms are not welcomed, and the government wants to understand every suspicious service and money laundering activity.
3. CAC has the highest right to determine whether a service is legal, such as current Internet services, all blockchains and BaaS companies will be monitored by the government, and the creativity with blockchain will be killed with risk control.

The new regulatory impact of the Chinese government will reduce blockchain fraud. Most Westerners think that the total number of Chinese team members they found on the Internet is a scam project, but they don’t know that the real fraud in the local market far exceeds their expectations. Most fraudulent projects are only available in Chinese, and their project doesn’t even have any blockchain to letting customers trade with strings generated on their own websites instead.

The analysis of the regulation:

On the positive side, the new rules will help amateurs avoid fraudsters making money from the blockchain concept. On the negative side, however, regulation will completely deprive the entire blockchain industry in China, and strict supervision will seriously hinder the innovation of blockchain projects, which will increase the brain drain of the top blockchain.

At the same time, new capital will become even tenser when there are market bad news in Chinese regulations, because some of them have some interest in blockchain through cryptocurrency. This will make the cryptocurrency bull market comes later than expected.