By Ledger Insights
30, March, 2021
Red Date Technology, the key developer of China’s Blockchain-based Service Network (BSN), said it had inked a deal with R3 to deploy the enterprise blockchain Corda on the BSN network. The agreement is for both the free version of Corda and the Corda Enterprise blockchain paid version. It’s the first time BSN has made a deal to resell an enterprise blockchain into China. It seems some of China’s big banks plan to use it.
The BSN was initiated by the Chinese government’s State Information Center (SIC) along with Red Date, China Mobile and China UnionPay. The aim is to provide a low-cost blockchain network making it accessible to the masses and offering numerous different permissioned blockchain technologies. In other words, companies don’t have to set up their own nodes.
So far, the BSN supports Hyperledger Fabric, FISCO BCOS, CITA (a Chinese enterprise Ethereum), and Baidu’s XuperChain with several others announced. With a deal already inked for ConsenSys’ Quorum to be added, Corda was the odd one out of the big three enterprise blockchains until today.
There are more than 100 city nodes in China, with plans for 150 by the end of 2021.
A separate international BSN network supports public blockchains, but the R3 deal is with the Chinese network.
The entry into China marks an about-turn for R3, which already had a significant presence in Asia for some time, but until now has not targeted China. R3 has offices in Singapore and a joint venture in Japan, with partners deploying its technology in Thailand, India and elsewhere. Meanwhile, China is one of the countries that has most embraced permissioned blockchains.
“China understands the profound and transformative capabilities of blockchain technology—and has underpinned its position at the forefront of blockchain innovation through BSN,” said R3’s Head of APAC Amit Ghosh.
“This collaboration paves the way for greater adoption of Corda in the Chinese market—supporting the continued growth of numerous industries including trade finance, supply chain, capital markets, insurance, and financial services.”
Our observation is R3 is also intensely interested in becoming a key player in central bank digital currencies (CBDC), a goal it shares with the BSN. Given the digital yuan’s advanced testing stage, it will soon present an opportunity to engage with a live CBDC.
Red Date also said it will import some existing CorDapps onto the network. The Corda-based Contour trade finance network is based in Singapore and boasts Standard Chartered and HSBC as members, which both have a significant Chinese presence and Bank of China (Hong Kong) is a participant. Just last week Contour partnered with ThoughtWorks to ramp up in China. We’ve reached out to R3 to find out which Dapps are likely to be deployed.
While the BSN is hosted by numerous cloud providers, including AWS and Microsoft Azure, the announcement stated that all the Corda notary nodes will be hosted in the China UnionPay cloud. We asked why and a Red Date spokesperson responded, “Most users of Corda framework will come from Chinese banks. As one of (the) state-owned financial institutions, China UnionPay’s public cloud services are more trustworthy to Chinese banks.”
This latter point is noteworthy because blockchain trade finance already has significant traction in China. Apart from Contour, the Marco Polo network is also based on Corda.
China has its own cryptographic standards, so in order to function within China, we assume the Corda cryptographic libraries would need to be replaced.
Corda Enterprise will be available on the BSN in the second half of 2021.
Copyright © 2021 Ledger Insights
The entry into China marks an about-turn for R3, which already had a significant presence in Asia for some time, but until now has not targeted China.