Martin Chorzempa, researcher at the Peterson Institute for International Economics, provided information on the motivations and goals underlying the development of the Blockchain Service Network (BSN). Approved by the State of China while speaking about consensus: Distributed on May 12.
Chorzempa highlighted the national goals of China’s blockchain strategy and described BSN as a means for China to stay informed about innovations in distributed ledger technology. (DLT) while restricting the penetration of foreign companies and protecting them from capital flight.
Developing China’s Strategy to Mitigate “Foreign Threat”
Chorzempa emphasized this China wants to “be up to date and know where the exciting innovations are and apply them well instead of having to respond to innovations from elsewhere”.
“China had negative experiences with the first waves of digital currencies, cryptocurrencies and ICOs,” the researcher continued:
“It was perceived as a kind of foreign threat that the PBoC, China’s central bank, had to quickly figure out how to respond to.”
Chorzempa said the People’s Bank of China is trying to find out what aspects of the emerging crypto industry offer “positive innovations”. and what parts of the sector were purely speculative. The bank also had to identify potential capital flight risks.
With BSN, China can take control of financial data
“Another element is the control of the financial system.”Said Chorzemba.
He explained that:
“AliPay and WeChatPay are the dominant retail payment providers in China today, and it is really difficult for financial regulators to access their payment information because of the power of these companies […] A CBDC is therefore an option if the underlying billing is done in [la moneda digital nacional de China]”It could potentially allow this central bank to gain much more access to payment data and regain some power from these companies.”
The geopolitical narrative as an instrument of internal support
Chorzempa described the story of China trying to use its blockchain network to project power internationally to get support for the project among the citizens Conservative Chinese.
“I think the international geopolitical side is a potential internal selling point in China for maybe some of the more conservative hardliners, but I still don’t see any credible reason why a digital renminbi would help internationalize right now.”
Chorzempa said that most of the use of AliPay and WeChatPay outside of China is related to tourism
“Is there an element of [transacciones] involved cross-border, but it won’t necessarily be able to achieve the kind of international or cross-border scale that something like Libra could possibly have. “