China to deploy a national blockchain service network

China is now testing a nationwide blockchain service network (BSN), a service platform for underlying blockchain technology, state-run media Xinhua News reported Tuesday.

The BSN is expected to help reduce the technical and economic threshold for blockchain applications, said Zhang Xueying, deputy head of the SIC.

Why it matters: Municipal governments in China have been pushing blockchain-related projects over the past few years, but there has been few nationwide efforts to this scale.

• The initiative, expected to spur new blockchain-related industries and businesses, is part of a wider move to promote the development of smart cities and the digital economy.

Details: The new blockchain infrastructure network is jointly launched by the State Information Center (SIC) and six institutions including China Mobile and China UnionPay.

• The initiative is now in the beta testing phase across cities in China.
• The State Information Center will oversee the planning of a “trans-regional public infrastructure network” while China UnionPay and China Mobile will provide the relevant blockchain technology support, and network and data resources.
• The core technology is said to be completed and the platform is now being tested across the country. It is unclear what technology the BSN itself will be based on. However, Li Huidi, executive vice president of China Mobile, expects that it will completely change the high-cost network infrastructure of consortium blockchains and ultimately become a convenient, high-quality, low-cost environment for developers to develop and deploy blockchain applications.
• The network will help link up the government, enterprises, institutions, tech companies, and other partners in the blockchain industry and enable data and resources to be shared more smoothly, China media reports cite China UnionPay President Shi Wenchao as saying.
• The BSN is in the process of deploying 50 public nodes across 31 Chinese cities. All resources on the platform will remain free of charge until March 2020. Other entities including financial institutions are expected to participate in the network.

Context: Chinese state-controlled institutions have launched a number of industry blockchain initiatives in the past.

• China UnionPay started exploring and researching blockchain applications in 2015, specifically focused on blockchain’s use in electronic invoice, billing, and supply chain finance. It teamed up with IBM to develop a blockchain-based platform for loyalty points exchange in 2016. Along with Bank of China, China UnionPay started looking into blockchain-based payment systems last year.
• China Mobile, along with telecommunication firms in the country including China Unicom and China Telecom, created a consortium last year to explore blockchain use cases.