A Chinese government-owned organization is developing three “blockchain standards” to govern privacy, deposits, and smart contracts made possible through the technology. The move is said to “better guide” the burgeoning local industry, reported China Money Network on October 8, 2018.
Augmenting the Local Industry
Li Ming, official and director of the state-owned China Electronics Standardization Institute (CESI), told local reporters the three blockchain-focussed standards will be associated-based, instead of a nationwide issuance. Discussions reportedly began in mid-2018, and the standards are expected to be unveiled at the end of 2019.
Ming added the association-based standards provide a foundation for setting national blockchain standards, and in turn, international standards referring to Chinese enforcement.
The first draft of standards is expected before the end of 2018 and will be published by CESI’s dedicated Blockchain Technology and Industry Development Forum unit. The Forum was founded in October 2016 by the Ministry of Industry and Information Technology of China and has led multiple studies in the fields of blockchain and distributed ledger technologies (DLTs). The body’s most prominent research publications are “Reference Architecture of Blockchain” and “China Blockchain Technology and Application Development White Paper (2016).”
The rise of blockchain technology has led to a ripple effect in the creation of several industries based upon the innovation, which includes the dynamic $220 billion cryptocurrency market and peripheral businesses like mining, custodial services, and insurance to support the latter.
However, the vast ecosystem has spurred governments and regulators worldwide to introduce control measures for the industry, in a way that innovation remains unstifled but potential criminal and money laundering acts are also mitigated.
China’s Blockchain Push
China is emerging as a forerunner in the blockchain space, regardless of its infamous ban levied on cryptocurrencies in September 2017. The country has since developed DLT systems for governance, tax collection, shipping, and even invested $1.6 billion in a “blockchain incubator park” based in Huangzhou.
The creation of national standards is a necessity both for the industry to grow optimally and to earn adequate trust from citizens. China’s development in this regard can presumably be followed by other major jurisdictions, including the U.S., U.K., and the European Union.
Craig Dunn of the International Standardization Technical Committee for Distributed Ledger Technology believes “more than 50” countries are participating in developing blockchain technology standards. He noted:
“The blockchain is gradually being accepted, and more and more people are beginning to recognize, invest in, or use [it]. But at the same time, many people are skeptical and international standards are needed.”
Meanwhile, Ming highlighted that China’s blockchain standards will be “recommended,” and not enforced as a mandate. Instead, the rules exist solely to guide the nascent industry towards sustainable development.