China’s state-owned Blockchain-based Service Network (BSN) has announced that it will launch 24 “public permissioned” blockchains for BSN China in compliance with the mainland’s regulatory requirements, according to BSN’s official WeChat post.

Backed by Beijing and giant state-owned companies like China UnionPay, China Mobile and China Merchants Bank, the ambitious BSN initiative aims to provide a cheap and efficient way for small and medium-size enterprises to use blockchain technology and build decentralized apps (dApps) in all kinds of application scenarios, not only for China but all around the world. 

In July, however, BSN was officially split into two entities — BSN International and BSN China — to allow China greater control over BSN users on the mainland. 

BSN International provides permissionless services through integrating public chains like Ethereum, NEO, Nervos and more. It wants to attract global developers to build dApps through BSN’s international portals and also achieve some level of interoperability with Chinese permissioned chains. 

BSN China, which owns the majority of BSN’s city nodes across the mainland, is a separate system that cannot access those public chains, in accordance with China’s strict government laws and regulations towards cryptocurrency and blockchain technology. For example, China requires all the developers for BSN China to provide identification information before they could use its blockchain services, according to a government document. 

To provide a bridge between the two systems, BSN China chose five city nodes to connect with BSN International, but the dApps running on those five nodes will still need to obey China’s laws and regulations for blockchain and cryptocurrencies. 

Now, BSN China will create its own version of “public chains” by localizing 24 more. As its official name implies, BSN’s Public Permissioned Blockchains will be a hybrid of the two types of blockchain networks. The project will start in September and aims to launch in the middle of November 2020.

Aside from allowing designated developers access control, the new permissioned blockchains will also cancel the mechanism of paying tokens — such as the so-called “gas” that Ethereum levies as transaction and operating fees — and instead will require future users to pay directly by renminbi through both offline and online ways, such as WeChat Pay, Union Pay or offline remittances. 

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“As an important part of the development of global blockchain technology, the public chain has its own logic of technology design, application scenarios and ecosystem. However, due to laws, regulations and other reasons, the promotion of public chains in China has been lacking effective methods and channels” said Yifan He, the CEO of Red Date Tech company, which is in charge of the technical part of BSN.  

“It is the most practical way for public chains to enter the Chinese market in compliance with Chinese legal and regulatory requirements,” He added, according to BSN’s official announcement.   

The new public permissioned blockchains are being launched in cooperation with Huobi Group — the parent company of Huobi Exchange, the second-largest cryptocurrency exchange by volume — and another technology company that declined to be publicly identified. He described the unnamed company as one of the top five cloud service providers.  

According to ZDNet, the top five cloud service providers in the world are Amazon Web Services, Microsoft Azure, Google Cloud Platform, Alibaba Cloud and IBM. 

He also said the first year of usage on the new Public Permissioned Blockchain would be free.

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