China’s state-sponsored blockchain company launches a major overseas project

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

Blockchain-based service network (BSN) bills itself as a “one-stop shop” for distributing blockchain applications in the cloud, a process that can otherwise be costly and time-consuming. It aims to connect different blockchains to help companies implement the technology.

The start-up Red Date Technology, headquartered in Hong Kong, is one of the founders of BSN. The company’s CEO Yifan He told CNBC that BSN plans to launch a project called BSN Spartan Network Abroad in August.

Blockchain became prominent with the cryptocurrency bitcoin, but the definition has since expanded. It refers to a system of shared activity lists, which can be public and accessible for all to see, or private, where only some participants can use and change it. Bitcoin is an example of a public blockchain.

However, BSN’s blockchain network does not operate with any cryptocurrencies because China has cracked down on digital coins.

Supporters of blockchain technology say it can reduce costs and speed up some business processes. Chinese President Xi Jinping has personally supported the technology, raising 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 operate 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. But he said the fee would be paid in US dollars instead of Ethereum’s related cryptocurrency called ether.

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

“That’s why we are working with other major public chain protocols to convince them that mainstream are non-crypto public chains.”

The Red Date Technology manager admitted that it is a challenge not to have cryptocurrencies as part of the company’s product offering. He said the BSN Spartan Network would be “difficult to squeeze the first or second year because most people in the blockchain industry only understand crypto.”

BSN is likely to face scrutiny abroad due to links with 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). China Mobile, a state-owned telecommunications company, is also behind the project.

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

“That’s why when we launch in August we will open source code immediately and we are working with many western companies,” he said.

“People will say that BSN is from China, it’s dangerous. Let me emphasize, BSN Spartan will be open source … we will not have access to anything on our part.”

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