R3 is growing Corda’s reach with China’s Blockchain Services Network (ft Yifan He & Todd McDonald)
Cryptocurrencies like Bitcoin are shaking up traditional finance and shifting the tectonic plates of investing, but the technology underlying digital assets — blockchain — may eventually have a bigger impact on the world. Today, most applications on public chains such as Ethereum are centered around the economic layers of cryptocurrencies, such as decentralized finance (DeFi). But for a country like China, where public chain applications may not always be aligned with local regulations, permissioned chains are presenting corporations an alternative as well as greater protection from the volatility of cryptocurrency prices. “If we ran an application on a public chain, the revenue must be in cryptocurrency. Then, the cost is in cryptocurrency, the revenue is in cryptocurrency — that makes no sense,” Yifan He, the CEO of Red Date Technology — the company behind state-backed Blockchain-based Service Network (BSN) in China — told Forkast.News in a video interview. “Next year, the cost could be more than your revenue.” BSN recently scored the licensing rights to R3’s Corda Enterprise and Corda-based Open Permissioned Chain to resell the enterprise blockchain for developers in China, which would allow Chinese banks and other companies to adopt Corda’s technology “Large corporates are coming to these networks to help improve their working capital, to help finance their business day-to-day,” Todd McDonald, R3’s co-founder and chief product officer, told Forkast.News. “The volatility of having to pay for transactions in a cryptocurrency is sort of the opposite of what they’re trying to achieve.” According to He, there are at least five banks in China that have approached Red Date to build apps using Corda, or CorDapps. Corda was once a storied technology from abroad that piqued the curiosity of research centers and development teams across the mainland. These curious developers never had access to Corda’s permissioned blockchain — until now. “Now, it is very easy to access our network based on Corda, for everybody.” He said. “We really want the high school students, the colleges, to just have a class teaching how to program Corda.” As Beijing leads ahead of the pack among major nations in developing a central bank digital currency, the nation has also been building out the infrastructures for the Web 3.0 era through ambitious initiatives like BSN. “The focus within Europe is more on, what is the potential for something like a digital euro as more of a bigger project across the European Union,” McDonald said. “I would love to say that in the U.S. there is an equal amount of common investment on the infrastructure side, but it’s really being led, obviously, by the private sector.” Watch He and McDonald’s full interview with Forkast.News to learn more about how China’s BSN is looking to leverage Corda’s open-source protocol to drive further interoperability on the network, what the future might hold for BSN and other state-backed networks, the limitations of focusing too closely on cryptocurrency as an application, and more.