Ramifications of China’s new blockchain rules hit home

China’s internet regulator is proposing curbs that go against the original spirit of blockchain, but for some, they’re the price to pay for participating in the country’s still burgeoning sector.

The country’s Cyberspace Administration of China (CAC) released the draft rules for public comment last Friday. The proposal calls for blockchain service providers in China to, among others, register with authorities, gather real-name information from their users, control content appropriately, and provide data for government inspection.

The plan poses the biggest threat to companies who provide services that are considered illegal such as exchanges. When such activities were banned last year, many companies simply registered overseas but continued operations in China. The new rules would effectively wipe out such companies, experts say. For companies currently operating within the law, the fresh regulatory measures could mean additional costs as companies move to invest in the technology and people needed to ensure compliance.

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