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

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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 run by large corporates 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 the BSN. He envisages people worldwide using it for “any traditional IT system to leverage the capabilities of the underlying blockchain technology in an easier and more cost-effective way.”

Yifan He likes to say that the internet got 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 aim is to provide low friction low-cost access to blockchain technology.

Not long after, plans for an international network were announced. The original aim was for the international version to provide low-cost access to standard public blockchains with an interoperability layer. Since then, China has banned cryptocurrencies. Hence, the BSN Spartan Network repeatedly refers to the blockchains as ‘non crypto’ or NC. The Spartan Network even has a token NTT, which stands for non-tradeable token and is used to pay for blockchain transactions, gas.

“We are excited about the possibilities the BSN Spartan Network opens up for Hong Kong corporates 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 the equivalent of using Huawei telecom equipment which has been banned in the United States and partially in the UK. But not everyone in the Asia Pacific region will share that view. 

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

Conventional public blockchains have all the data on public display, so some might ask, what’s the difference? Firstly there is a stronger link to identities. And it depends on what data is put on the chain. If it’s just a data fingerprint or hash that can’t be interpreted into anything confidential, then there’s no risk. APIs linking any blockchain to corporate systems should be thoroughly secured, no matter whether that is BSN or any other solution.

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

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