Surveillance Concerns as China’s State Blockchain Firm Plans International Expansion

The Blockchain-based Service Network (BSN) is planning a foray beyond China with an international version of the platform.

The Chinese state-backed blockchain company is planning on international expansion as Beijing continues with its digital ledger drive.

The BSN is a “one-stop service” that allows customers to deploy blockchains into the cloud without having to develop their own networks from scratch. Company CEO Yifan He told CNBC that the firm is planning to launch a project called BSN Spartan Network overseas later this year.

The BSN does not operate with any cryptocurrencies due to Beijing’s harsh stance towards them and banishment from the People’s Republic. BSN operates 28 blockchain frameworks, and 19 portals, and has more than 25,000 developers and 3,000 apps. In Jan, it was reportedly working on a central bank digital currency (CBDC) system.

A Chinese blockchain network for the world?

The Spartan Network will comprise around six or so public blockchains that do not use cryptocurrencies, the report added. One of those will be a version of Ethereum disassociated from ETH with network fees paid in dollars instead of the blockchain’s native currency.

Yifan He added that the purpose of the project is to reduce the cost to use public chains to very minimal levels. This would enable more traditional IT systems and businesses to use public chains as part of their systems, he added.

It is unclear whether international companies will flock to the system considering China’s levels of state surveillance over all things internet-related. However, He attempted to alleviate concerns before they arise by stating that the system will be open-source and immune to state meddling and surveillance.

“People will say BSN is from China, it is dangerous. Let me emphasize, BSN Spartan will be open source … we will not access anything from our end.”

China state surveillance concerns  

This may not be enough, however, since the company is backed by the State Information Center (SIC) which comes under China’s all-seeing National Development and Reform Commission (NDRC). The NDRC is a macroeconomic management agency with broad administrative and planning controls over the Chinese economy. Furthermore, there are already major concerns that China’s digital yuan will be used as a surveillance tool.

He admitted that BSN’s Chinese background is a “huge challenge,” adding that once launched in Aug, the Spartan Network will be open-source from the start.

It will allow third-party security firms to inspect the code to ensure there are no backdoors for the government of China. It remains to be seen whether this will be enough for Western companies which are already very skeptical about business with the Beijing regime.

Earlier this month it was reported that South Korean internet giant Kakao’s public blockchain, Klaytn, will build an open-permissioned blockchain for BSN. Known as the “Chongqing Chain” it will run on the network internally and it is unclear whether it will be part of the Spartan Network.