The Chinese State: Blockchain as a Tool to Control Citizens
RegulationBit News Today2 min read
China has been stepping up the use of blockchain in recent months to monitor its citizens. The aim: to improve data accuracy and tamper-proof records. However, it's leading to privacy and free speech concerns.
To that end, China's Cybersecurity Administration released new guidelines for blockchain platforms last month. They require real-name registration, robust user identification and verification, as well as centralization of important data. These guidelines follow similar policies for social media, messaging and other online platforms. ## Expanding Social Credit System
More recently, some local governments have started piloting the use of blockchain for their social credit systems. These systems assign citizens a score based on their online and offline behavior, which can affect their social benefits, employment, and even travel privileges. Unverified media reports suggest that those with low scores will eventually be ineligible for a number of financial services.
Local governments are testing blockchain-based identity cards that store citizens' social credit scores and personal records. They say this will help maintain the accuracy and integrity of the data, in a bid to prevent cheating and support finance innovation in the country's rural areas. ## Companies Caught in the Crossfire
The new guidelines are also affecting businesses in the blockchain industry. Some builders of blockchain services said they were not allowed to deploy decentralized applications out of the country, and some are reluctant to build blockchain platforms at all.
Even companies outside the crypto space feel the impact. Two major medical institutions have openly opposed the move to store medical records on blockchain, citing concerns over data privacy, data security, computing costs, and system performance. ## Citizen's Reaction
There has been a backlash from citizens against the government's move to use blockchain for stricter monitoring. Some are particularly concerned it will be used to track the spread of religion, even though the government denies any intent to do so. Others worry it will be used to track what they say, post, and share online, a charge the government also denies.
Some also question the accuracy and usefulness of the blockchain data. They point out the problems with China's social credit system, such as its reliance on unverified data and its tendency to punish people for minor offenses or for not having committed any offense at all. ## The Outlook
The more stringent regulations are certain to affect further growth of China's blockchain industry. It is unclear how they will impact the government's blockchain-based social credit system in the long run.
However, the prime minister has indicated that blockchain policy in China will become even stricter in the coming years. As blockchain technology becomes more accessible, it is clear that the Chinese government is keen to use it as a tool for monitoring and control.
