Blockchain Companies in China Will Soon Face Wide-Reaching Censorship
Although the regulations are fairly wide in scope, they will primarily prohibit blockchain companies from disseminating information that violates China’s content laws. It seems that the new regulations are not intended to control the content of various blockchains directly, which would be a monumental task. Instead, the regulations are targeting firms that provide unapproved blockchain services, adding another brick to the Great Firewall of China.
The targets of the new regulations seem to be access providers, such as websites and applications. However, node operators, who are responsible for powering blockchains, are mentioned in the regulations as well. Non-compliance will carry a fine of 5000-30,000 yuan ($737-$4420 USD), meaning that the law may only discourage unapproved blockchain activity, not stop it outright.
China has previously taken harsh stances against cryptocurrency: the country has cracked down on ICOs, exchanges, and mining in the past. Some locales have even gone as far as to shut down promotional events. However, investors seem to be bypassing restrictions, and blockchain startups that divert their focus away from crypto seem to fare well–making Chinese regulations something of a mixed bag.
Most of China’s previous bans have had primarily financial motives. This law, however, is an explicitly content-focused policy that is in line with China’s broader censorship. Some blockchain platforms, such as Substratum, are specifically trying to bypass censorship by providing a VPN alternative. Other blockchains such as Ethereum can simply be used to host prohibited content, meaning that blockchain tech may pose a wide-ranging threat to China’s authority.
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