China’s congress has passed a cryptography law to promote crypto development and ensure sound cybersecurity, according to a report from Xinhuanet, China’s news agency, on Saturday (Oct. 26).
The law will regulate the use of cryptography, facilitate the cryptography business and establish cybersecurity, according to the NPC Constitution and Law Committee, the news agency reported.
According to the law, “the state encourages and supports the research and application of the science and technology in cryptography and protects the intellectual property rights in cryptography.”
The decree also underlines the training of talent in cryptography and will offer awards for “outstanding contributions.”
Under the new regulation, cryptography will be organized into commercial crypto, as well as core and common, which will be governed by special authority and utilized to keep national secrets secure.
A research team was established in 2014 by China’s central bank to explore launching a digital currency and increase China’s control of the money supply, Reuters reported on Saturday (Oct. 26).
The digital currency is expected to be like Facebook’s Libra coin and used across payment platforms such as WeChat and Alipay, a senior central bank official said last month, according to the news outlet.
The announcement came one day after Chinese President Xi Jinping called on the country to seize opportunities in blockchain technology.
David Marcus, the executive in charge of Facebook’s proposed digital currency, said if Libra fails, the U.S. could fall behind China in the race for legitimized cryptocurrency, and subsequently in influence around the world.
While Libra is continually criticized and scrutinized around the globe, China is developing its own state-backed cryptocurrency. That would be a real threat to U.S. influence, Marcus said earlier in October.
Many politicians around the globe are opposed to Libra, saying that it could destabilize the global market and has the potential for money laundering and other illicit uses.