According to a China Money Network report, China has formally implemented a law governing cryptographic password management as part of its pre-release plans for its central bank digital currency (CBDC).
The national cryptography law, established in October 2019, makes government responsible for setting encryption standards covering both the state and industries. Encryption is divided into three categories: core, common and commercial password. The cryptography law grants the Communist Party authority over all three categories.
On the other hand, China has not yet set a formal release date for its CBDC, which will be the first state-backed cryptocurrency in the world. In December 2019, the People's Bank of China (PBoC) confirmed it would start live testing of the currency with select banks before 2020.
Around the time the cryptography law was enacted, Chinese President Xi Jinping announced plans to devote state resources toward blockchain technology. The legislation thus is seen as crucial for advancing both blockchain and the digital currency.
At the mean time, the National Intellectual Property Administration (NIPA) in China continues to clarify the guidelines for blockchain patent applications, which are set to become effective as of Feb. 1 this year.
At the end of December 2019, the NIPA announced the revised guidelines to patent applications for new emerging technologies such as blockchain, artificial intelligence, big data, and business rules and methods.
By the end of 2019, China has seen more than 12,300 blockchain-related patents submitted, records from global patent database incoPat show. In 2019 alone, there were over 4,295 patent applications pertaining to blockchain technology, with Tencent
Beijing's recent public praise of blockchain more broadly sparked a wave of enthusiasm that ricocheted across cryptocurrency markets. Bitcoin (BTC) rose, while China-based altcoins delivered considerable growth over a short period.
At the same time, state-controlled media stressed that the endorsement was not tantamount to authorities slackening the strict ban on cryptocurrency trading in place since September 2017.
