China's BSN Will 'Localize' Public Blockchains for Local Use

Unlike in the localized version, public decentralized chains are allowed in the global version of BSN."There have been few effective ways for public chains to enter the Chinese market and scale up due to legal and regulatory requirements and how these projects position themselves," the memo, translated by Coindesk from the original Chinese, said of this latest development.

"The public decentralized chains will become public permissioned consortium chains, which can be supervised by regulators, and that is currently the most direct and effective way for the projects to be compliant and reach domestic users within China."

To make public decentralized chains, such as Ethereum, permissioned, BSN will only allow its designated operators to build and operate nodes, where dapps verify on-chain transactions and store data.

BSN aims to complete all 24 public chains' integration with the domestic version of the network during the first quarter of 2021 and enable these chains to share data with each other in the first half of the same year.

The networkhas formed Public Permissioned Blockchain, a consortium to govern the services on adapted public chains.

BSN will be responsible for compliance with Chinese regulators and adapting the public chains' technical framework into the network.

While the memo does not disclose any names of these 24 public chains, BSN has already integrated major international projects including Tezos, Ethereum and Cosmos' IrisNet.

Public decentralized blockchains have been under heavy scrutiny from the Chinese government since 2017, when China cracked down on initial coin offerings and local exchanges.

Another reason why China is critical of public decentralized chain projects is the potential for scams, such as Ponzi and pump-and-dump schemes offered as initial coin offerings that mushroomed during and after the 2017 ICO boom.

AntChain, a permissioned enterprise blockchain developed by Ant Financial, a subsidiary of Chinese tech giant Alibaba, has been one of the inspirations for BSN to launch the Public Permissioned Blockchain consortium, according to the memo.