China’s state-backed blockchain firm will launch large foreign projects

China’s blockchain-based service network (BSN) is planning a major international expansion project in August.

Uchiro Chino | Moments | Getty Images

The Chinese state-backed blockchain company is planning its first major international expansion, its CEO told CNBC, as Beijing continues to make technology a top priority.

The blockchain-based service network (BSN) bills itself as a “one-stop shop” for placing blockchain applications in the cloud, a process that can be otherwise costly and time consuming. It aims to bring together different blockchains to help businesses set up technology.

One of the founding members of Red Date Technology BSN, a start-up headquartered in Hong Kong. The company’s CEO Ifan Hay told CNBC that BSN plans to launch a project abroad in August called the BSN Spartan Network.

Blockchain cryptocurrency has dominated with bitcoin but its definition has expanded since then. It refers to a system of activity ledger, which may be public and accessible to all, or private, where only certain participants can use and modify it. Bitcoin is an example of a public blockchain.

BSN’s blockchain network, however, does not work with any cryptocurrency because China has cracked down on digital coins.

Proponents of blockchain technology say it could reduce costs and speed up some business processes. Chinese President Xi Jinping has personally endorsed the technology, making it a national priority.

International planning will be a big push 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 a non-crypto version of the Etherium blockchain when the project launches in August.

Blockchain transactions usually cost money. But he said the fee would be Ethereum-related cryptocurrency ether instead of US dollars.

“The goal is to reduce the cost of using public chains so that more traditional IT [information technology] Systems and business systems can use public chains as part of their systems, “he said.

People will say BSN is from China, it is dangerous. I insist, BSN Spartan will be open source – we will not access anything from our edge.

Ifan Hee

CEO, blockchain-based service network

“So we’re working with other major public chain protocols to convince them that the mainstream is a non-crypto public chain.”

The CEO of Red Debt Technology acknowledges that not having cryptocurrency as part of the company’s product offerings is a challenge. He said the BSN Spartan network “would be difficult to push in the first or second year because most people in the blockchain industry only understand crypto.”

‘Big challenge’ over China’s connectivity

BSN will likely face investigations abroad because of its links to the Chinese government. The company is supported by the State Information Center (SIC), which sits under China’s powerful National Development and Reform Commission (NDRC). State-owned telecommunications company China Mobile is also behind the project.

He said BSN’s Chinese background was a “huge challenge” because it was expanding internationally.

“So when we launch in August we will be open source immediately and we are working with a lot of western companies,” he said.

“People will say BSN is from China, it’s dangerous. I insist BSN Spartan will be open source … we will not access anything from our edge.”

He added that users would be able to check the code behind the project to make sure there is no backdoor access for the Chinese government.

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