Blockchain Service Network could accelerate the launch of the Chinese CBDC

Eden Dhaliwal of Conflux Network argues that recent BSN developments could prompt the launch of the Chinese CBDC

The Blockchain Service Network could accelerate the launch of the Chinese CBDCNOTICES

From the Chinese government’s point of view, cryptocurrencies are not legal tender; instead, they are classified as a sort of „virtual commodity“, but some operators in the sector believe that the Blockchain Service Network (BSN) infrastructure can stimulate the development of virtual currencies, such as a CBDC.

In an interview with Cointelegraph, Eden Dhaliwal, Global Managing Director of Conflux Network, the blockchain layer-1 protocol and the only public blockchain project approved by the Chinese government, said Beijing is strongly motivated to launch a CBDC to „dominate the digital commerce landscape and make the economy fit for the future.

BSN is an important infrastructure network for blockchain interoperability.

In July, it announced the decision to separate governance into two ecosystems: BSN China and BSN International.

Dhaliwal expressed its views on why BSN has been divided in this way and the impact it will have on China’s blockchain ecosystem:

„Most likely BSN has split up to make the network compliant, safer and economically stable, without losing the functionality of a public blockchain […]. This two-tier ecosystem ensures that capital and assets can pass freely through the various blockchains and countries without compromising network reliability“.

Speaking about the integration of public blockchains on the BSN, Dhaliwal said that, in order to reach retail users and ensure massive growth of the ecosystem, the network „needs to integrate a wide variety of public blockchains to create interoperability, innovation and internationalization of digital assets and tools“:

„As one of BSN’s main objectives is to advance the blockchain ecosystem in China, the implementation of private solutions allows it to focus on limited use cases in the corporate and government sectors“.

Dhaliwal also told Cointelegraph that integrating public blockchains into the system „creates opportunities for innovative financial instruments and digital initiatives that interface seamlessly with CBDC.

In August, the Chinese Ministry of Commerce announced that further CBDC testing will take place in the Beijing area and in Tianjin and Hebei provinces. According to a report in the Wall Street Journal on 14 August, there is still no clear timetable for the launch of a nationwide pilot programme of China’s CBDC.