China’s Beijing Certificate Authority (BCA) has unveiled the Blockchain Security Assessment Service to analyze the software of blockchain firms.
BCA is the only body approved by the China Certification and Accreditation Administration (CNCA) to operate in the financial sector. The tool developed by BCA will assess the main technical characteristics, performance and security level of blockchain-based platforms. In addition, the service will allow you to analyze the speed of transaction processing, as well as audit nodes, registers and encryption algorithms. With the Blockchain Security Assessment Service, auditing firms will be able to verify whether the encryption keys used in open source applications are actually created in China.
According to local law, any encryption technology used in publicly available applications must be developed in China and registered in Beijing. For example, the Hyperledger project is going to present a version of its system, which will be improved using a special protocol developed in China. This is necessary so that the Hyperledger platform can be used in the country without violating the requirements of local regulators.
BCA explained that there are tens of thousands of firms registered in China claiming to be blockchain-related. However, the question is whether they really work legally in this industry or are just hiding behind the buzzword “blockchain” for SEO purposes or to attract the attention of investors. Current industry standards do not differentiate firms that focus on distributed ledger technology from organizations that produce low quality codes.
The Chinese authorities are aware of this problem and are trying to find an effective solution for it. So, in April, the Chinese government created a technical committee of 15 organizations to develop government standards for blockchain and distributed ledger technology (DLT). The committee members were the People’s Bank of China (PBOC), MIIT, Tencent, Zhejiang University and Baidu. In addition, this month the NBK presented the standards that blockchain-based financial applications must meet.