China Approves a New Cryptography Law Prior to The Launch of Its Digital Currency Project

In yet another substantial step to strengthen its plans for the launch of its highly anticipated digital currency, China’s rubber-stamp parliament has approved a new law for governing cryptography, according to the latest state media report published on Saturday. The law will become effective from January 1, 2020.

The modern era has started accepting cryptocurrencies as a potential replacement to fiat money owing to the lucrative and widescale features it offers to the users. With a view to exploiting the benefits of the virtual currency domain, China’s central bank in 2014 formulated a research team to put forward its own digital currency in the market. This pathbreaking announcement by Chinese authorities placed it a notch higher in comparison to its competitors. China is adamant to launch a digital currency which is capable of reducing the costs related to traditional paper money and also aids in maintaining better control over the money supply.

As per the information, China’s digital currency is likely to have similarities with Facebook’s Libra project. A senior official of the central bank stated last month during an interaction that the currency will be able to use as a medium across reputed payment solutions like WeChat and Alipay.

The official Xinhua news platform revealed that the new law would be focused at “facilitating the development of the cryptography business and ensuring the security of cyberspace and information.” The law affirms that the state is committed to render support and encouragement to the research and utilization of science and technology in cryptography while giving due importance to confidentiality.

Libra, Facebook’s stablecoin project, has been under strict scrutiny since the announcement of its launch, which is slated for 2020. The regulators worldwide are stressing over the fact that Libra will facilitate money laundering as it has the power to gain popularity as a prominent digital payment system. Libra will be pegged by a reserve of bank deposits and short-term government securities. The Libra Association, the main driving force behind the Libra project has always refuted the allegation by saying that the introduction of Libra will improve transparency and will also help in stabilization of prices.

China has been at the forefront of exploring blockchain technology. Last week, Xi Jinping, the honorable President of China stated that the country should work in exploiting the merits of blockchain technology.