Chinas state backed blockchain company is about to launch its first

China’s state-backed blockchain company is about to launch its first major international project

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

Yuichiro Chino | moment | Getty Images

China’s state-backed blockchain company is planning its first major international expansion, its CEO told CNBC, as Beijing continues to make the technology a key priority.

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 connect different blockchains to help businesses deploy the technology.

Hong Kong-based start-up Red Date Technology is one of the founding members of BSN. The company’s CEO, Yifan He, told CNBC that BSN plans to launch an overseas project called BSN Spartan Network in August.

Blockchain was popularized with the cryptocurrency Bitcoin, but its definition has expanded since then. It refers to a system of shared activity books, which can be public and viewable by all, or private, where only certain participants can use and modify it. Bitcoin is an example of a public blockchain.

However, BSN’s blockchain networks do not work with cryptocurrencies as China has cracked down on digital coins.

Blockchain technology advocates say it can reduce costs and increase the speed of some business processes. Chinese President Xi Jinping has personally endorsed the technology and made it a national priority.

The international plan will be a big boost for BSN.

The Spartan Network will eventually consist of half a dozen public blockchains that don’t work with cryptocurrencies. One of these will be a non-crypto version of the Ethereum blockchain when the project launches in August.

Blockchain transactions usually cost money. However, he said the fee will be paid in US dollars and not in the Ethereum-related cryptocurrency called Ether.

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

People will say that BSN is from China, it’s dangerous. Let me stress, BSN Spartan will be open source… we won’t be accessing anything from our site.

Yifan Er

CEO, blockchain-based service network

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

Red Date Technology’s CEO admitted that not having cryptocurrencies in the company’s product offering is a challenge. He said BSN Spartan Network will be “hard to push in year one or two because most people in the blockchain industry only understand crypto.”

“Huge challenge” due to China links

BSN is likely to come under scrutiny overseas due to its ties to the Chinese government. The company is backed by the State Information Center (SIC), which reports to China’s powerful National Development and Reform Commission (NDRC). Also behind the project is China Mobile, a state-owned telecommunications company.

He said that BSN’s Chinese background is a “big challenge” as it expands internationally.

“Therefore, when we launch in August, we will immediately open source code and we are collaborating with many Western companies,” he said.

“People will say BSN is from China, it’s dangerous. Let me stress that BSN Spartan will be open source…we will not be accessing anything from our side.”

He also said users will be able to inspect the code behind the project to ensure there is no backdoor access for the Chinese government.