The Cyberspace Administration of China (CAC), the country’s ultimate censorship agency, has published a first draft on how it intends to regulate blockchain-related services founded within China.

The Regulation for Managing Blockchain Information Services’ is a blanket set of rules that aims to cover any company that utilizes blockchain technology as a means for storing, distributing or maintaining information.

Perhaps the most troubling proposition outlined in the paper is that all affected businesses will have to obtain and store personal data from its customers, such as mobile phone or national identification numbers: “Service providers must store the logs and content published by users of their blockchain services for six months and provide this information to law enforcement when required”.

Another states that businesses must not use blockchain to ‘produce, duplicate, publish, [or] disseminate’ information or content prohibited by Chinese law.

Under China’s notoriously strict censorship guidelines, this includes anything critical of the Chinese government or its leader Xi Jinping.

Blockchain service providers in highly-regulated fields like pharmaceuticals or publishing will be required to obtain specific licenses before they can register with the CAC.

Given that one of the key advantages of blockchain technology is its ability to retain the anonymity of its users, the CAC’s proposed rules could seriously hamper adoption of the technology.

Following a blanket ban on cryptocurrency trading in 2017, China’s move towards censorship of the technology that powers it is likely due to its ability to hide encrypt information within its logs. In the past it has been used to safely publish exposés from anti-government activists, with topics covered ranging from faulty government vaccines to #MeToo.

Somewhat surprisingly, this draft document has been released to the public so that feedback can be collected before the government progresses it through the legislative pipeline. Comments must be submitted by November 2.Should the document pass it will represent another serious step backwards for online privacy and freedom in what is already one of the world’s most heavily censored countries.