HSBC involved in launch of China-backed blockchain BSN Spartan Network – Ledger Insights

The blockchain-based service network (BSN) has launched a beta version of its BSN Spartan Network. This is the international version of China’s BSN, which includes versions of popular public blockchains such as Ethereum, Cosmos and PolygonEdge, which do not use cryptocurrencies. The validator nodes of the public permissioned network are operated by large companies such as HSBC, Emperor Group and Lan Kwai Fong Group, although many of the current companies have Hong Kong or Chinese connections. The beta testing stage will last for two months.

“99% of the world’s IT systems do not use cryptocurrency-based public chains to avoid being involved in unregulated and volatile cryptocurrencies,” said Yifan He, CEO of Red Date Technology, the technical architect of BSN. He envisions people around the world using it for “any traditional IT system to leverage the capabilities of the underlying blockchain technology in a simpler and more cost-effective way.”

Yifan Han likes to say that the Internet gained traction because it cost little to launch a website, and he wants to do the same for blockchain.

In 2019, the first Chinese version of BSN was unveiled, built by Red Date Technology as a joint initiative with UnionPay, the State Information Center (SIC) and China Mobile. The goal is to provide low-friction and affordable access to blockchain technology.

Not long after, the plans for an international network were made public. The original goal was for the international version to provide affordable access to standard public blockchains with an interoperability layer. Since then, China has banned cryptocurrencies. Therefore, the BSN Spartan Network repeatedly refers to the blockchains as “non-crypto” or NC. Spartan Network even has a token NTT, which stands for non-tradable token and is used to pay for blockchain transactions, gas.

“We are excited about the opportunities BSN Spartan Network opens up for Hong Kong businesses to digitize, tokenize and automate their business processes,” said Vincent Lau, Regional Head of International Payments for Asia Pacific at HSBC. “We look forward to exploring how our HSBC DLT Settlement Utility (HDSU) solution can streamline payment processes for business partners on the network.”

Many in the West will portray the BSN as equivalent to the use of Huawei telecom equipment which has been banned in the US and partly in the UK. But not everyone in the Asia-Pacific region will share that view.

BSN will argue that companies control the nodes, even if the companies mentioned in the current phase have strong Hong Kong or Chinese connections.

Conventional public blockchains have all data on public view, so some may ask, what is the difference? First, there is a stronger link to identities. And it depends on what data is put on the chain. If it’s just a computer fingerprint or hash that can’t be interpreted into anything confidential, there’s no risk. APIs connecting blockchains to enterprise systems should be thoroughly secured, whether it is BSN or another solution.

Meanwhile, Red Date last year raised a $30 million Series A led by Prosperity 7 Ventures, an indirect subsidiary of Saudi Aramco.