China passes new law to encourage cryptocurrency growth

Oct. 28 (UPI) -- China is moving forward with plans to promote technology's frontier of blockchain and cryptocurrencies, according to Beijing's state news agency.

Xinhua reported Monday China's National People's Congress has passed a law that will allow the issuance of state-sanctioned cryptocurrency.

The NPC's Standing Committee completed preparations for issuing crypto-assets on Saturday ahead of new legislation, according to the report.

The new crypto-asset law will come into effect on Jan. 1 with the aim of "helping to develop the crypto-asset industry and to ensure the security of cyber space and information," the Standing Committee said.

The report comes after Chinese President Xi Jinping said last week China will increase investment in blockchain technology, according to Bloomberg.

The statement triggered a buying spree among Chinese investors. Stocks witnessed double-digit gains as bitcoin rose 26 percent, according to the report.

"Most of these companies, especially those that are just beginning to state their connection with blockchain today, are trying to take advantage of the hype," said Li Shiyu, a fund manager at Guangdong Xiaoyu Investment Management, according to Bloomberg.

China wants to accelerate technological advances as it begins the fourth plenary session of the Communist Party's 19th Central Committee, which opened Monday.

The plenary session comes at the midpoint of Xi's second term. Ahead of the meeting on Sunday, China issued a booklet that highlighted Xi's leadership across all sectors.

Beijing is holding the meeting this week after postponing the plenary session in October 2018, owing to the trade war with the United States.

China's growth decline to 6 percent in the third quarter of 2019, the lowest level in nearly three decades.