China’s state-backed blockchain company to launch major overseas project
China’s blockchain-based service network (BSN) is planning a major international expansion project in August.
Yuichiro Chino | time | Getty Images
China’s state-backed blockchain company is planning its first major international expansion, its CEO told CNBC, as Beijing continues to make technology a key priority.
The blockchain-based service network (BSN) bills itself as a “one-stop shop” for deploying blockchain applications in the cloud, a process that could otherwise be costly and time-consuming. It aims to link different blockchains to help companies deploy the technology.
Hong Kong-based start-up Red Date Technology is one of the founding members of BSN. Company CEO Yifan He told CNBC that BSN plans to launch a project called BSN Spartan Network overseas in August.
Blockchain rose to prominence with the bitcoin cryptocurrency, but its definition has since broadened. It refers to a system of shared activity logs, which could be public and accessible to everyone, or private, where only certain participants can use and modify it. Bitcoin is an example of a public blockchain.
BSN’s blockchain networks, however, do not work with any cryptocurrency, as China has cracked down on digital coins.
Proponents of blockchain technology claim that it can reduce costs and increase the speed of certain business processes. Chinese President Xi Jinping has personally endorsed the technology, elevating it to a national priority.
The international plan will be a major boost for BSN.
The Spartan Network will eventually consist of half a dozen public blockchains that do not work with cryptocurrencies. One of these will be an unencrypted version of the Ethereum blockchain when the project launches in August.
Blockchain transactions usually cost money. But he said the fees would be paid in US dollars rather than an Ethereum-linked cryptocurrency called ether.
“The goal is to minimize the cost of using public channels so that more traditional computing [information technology] systems and commercial systems may use public strings as part of their systems,” he said.
“That’s why we’re working with other big public chain protocols to convince them that the mainstream is unencrypted public chains.”
The CEO of Red Date Technology admitted that not having cryptocurrencies as part of the company’s product offering is a challenge. He said BSN Spartan Network would be “difficult to push the first or second year because most people in the blockchain industry only understand crypto.”
“Huge challenge” due to ties with China
BSN will likely face intense scrutiny overseas due to its ties to the Chinese government. The company is backed by the State Information Center (SIC) under China’s powerful National Development and Reform Commission (NDRC). China Mobile, a state-owned telecommunications company, is also behind the project.
He said BSN’s Chinese background is a “huge challenge” as it expands internationally.
“That’s why when we launch in August, we’ll immediately open source and work with many Western companies,” he said.
“People will say BSN is from China, that’s dangerous. Let me point out that BSN Spartan will be open source…we won’t access anything on our end.”
He also said that users will be able to inspect the code behind the project to ensure there is no backdoor access for the Chinese government.