Per the report, the new regulatory framework aims to set standards for the application of cryptography and the management of passwords. The new regulatory framework establishes the role of a central cryptographic agency meant to lead public cryptographic work, creating guidelines and policies for the industry.
Implicit cryptocurrency regulation
The draft of the law was published on May 7 by a Chinese news outlet. The text is largely focused on government centralized password management and does not explicitly mention cryptocurrency, though it does focus on cryptography, a key component underpinning cryptocurrencies such as Bitcoin.
“The key take away is – the developing of new cryptography, hashing algo, even the usage of the tech, will be in the official legal realm. This means you need to follow the CCP standard for all ‘encrypted’ behaviors, which can be VERY broad, from mining to block propagation.”
Preparing for China’s national crypto
She concluded that the law is building the foundation for the upcoming Chinese national cryptocurrency, though there is no official timetable for its launch, one Chinese official confirmed in September.
As Cointelegraph reported yesterday, China’s President Xi Jinping has called for the country to accelerate its adoption of blockchain technologies.
Meanwhile, this past week, Facebook’s Mark Zuckerberg warned that Chinese superiority in the digital currency space could put the U.S. dollar at risk in an attempt to sell lawmakers his plans for the Libra stablecoin.
“China is moving quickly to launch a similar idea in the coming months. We can’t sit here and assume that because America is today the leader that it will always get to be the leader if we don’t innovate”, he argued in an official statement.
Canadian Fund Manager to List Bitcoin Fund on Major Stock Exchange
Canadian investment fund manager 3iQ received initial approval on its long road to launch a closed-end bitcoin fund on the Ontario Stock Exchange later this quarter.
The firm said on Wednesday that it received a favorable ruling before a panel of the Ontario Securities Commission (OSC) for the Bitcoin Fund, noting the commission moved to direct the OSC Director to issue a receipt for a final prospectus.
“We have addressed the questions of pricing, custody, audit, and public interest issues in a regulated investment fund. We intend to refile the prospectus as soon as possible”, CEO Fred Pye said in a statement.
3iQ claims its entrant is “the first regulated, major exchange-listed” bitcoin fund in the world – the caveat being that other firms have launched similar products that are unregulated or on smaller exchanges. In June, Swiss-based Amun AG launched its exchange-traded product (ETP) using the Bitwise 10 Select Large Cap Crypto Index as a benchmark on the Swiss SIX Exchange.
3iQ had been working closely with the OSC’s Investment Funds and Structured Products Branch to create an investment fund allowing retail investors to participate in a regulated and listed fund, according to Pye.
New York-based cryptocurrency exchange Gemini Trust Company LLC will provide custody services to manage the bitcoin in the fund.
3iQ partnered with asset manager VanEck to develop an innovative bitcoin benchmark from VanEck’s MV Index Solutions, a regulated index provider in developing cryptocurrency indices and data series.
VanEck withdrew its own exchange-traded fund application to the U.S. Securities and Exchange Commission in late January 2019.
In April, 3iQ acquired the rights to manage First Block Capital’s funds, including the FBC Bitcoin Trust and FBC Distributed Ledger Technology Adopters ETF, while First Block has a strategic investment in 3iQ.