China’s State-Backed Blockchain Services Provider Partners With EY to Add Ethereum Compliance Tools

The Blockchain-based Service Network (BSN), the blockchain infrastructure provider backed by the Chinese government, plans to offer blockchain analytics and financial auditing services for Ethereum developers in its network through a new partnership with Big Four auditor Ernst & Young (EY). 

The London-based accounting firm will provide BSN’s Ethereum users in China with two compliance products –  EY OpsChain and EY Blockchain Analyzer – according to a press statement shared with CoinDesk. 

EY OpsChain will integrate procurement and traceability functions into BSN, where its users on Ethereum can run procurement activities using tokens and smart contracts. The EY Blockchain Analyzer will offer blockchain analytics and financial statement audits to the users.

The new compliance services could further boost China’s efforts in the blockchain race against the U.S. More BSN’s users will be able to build and run blockchain projects in the network without worrying about compliance issues.   

“China is one of the largest markets for blockchain technology in the world, and, while EY teams have been operating there for several years, this is the EY organization’s first big step in deploying the EY blockchain platform in a scalable manner,” Paul Brody, global blockchain head at EY, said in the statement.

BSN was co-founded by state-owned telecom giant China Mobile, UnionPay and fintech startup Red Date in April 2020. The project aims to provide cloud services and a standardized development environment for blockchain developers. 

BSN is split into two versions: a domestic version, where only permissioned blockchains are available, and a global version, which allows developers around the world to build or run decentralized applications (dapps) on public chains adapted to its development environment. BSN “localized” Ethereum in its domestic version by making it an open permissioned blockchain, which could be controlled by an enterprise. 

“Initial availability will focus on the planned open permissioned version of Ethereum in China with a future extension to a controlled access version of the Ethereum network across the globe when it becomes available,” the statement said.

The move came after New York-based Ethereum hub ConsenSys teamed up with BSN in January. That partnership aims to bring ConsenSys’ enterprise ledger, Quorum, to China’s nationwide blockchain project.

BSN was co-founded by state-owned telecom giant China Mobile, UnionPay and fintech startup Red Date in April 2020. The project aims to provide cloud services and a standardized development environment for blockchain developers. 

EY has also joined the Financial Blockchain Shenzhen Consortium (FISCO), a Chinese non-profit organization dedicated to promoting the use of blockchain for financial applications. The accounting firm will use FISCO’s platform to make its compliance services available to more users in China and other Asia-Pacific regions, according to the statement. 

“By offering both FISCO BCOS and Ethereum, EY professionals will serve clients within China and across the Asia-Pacific region and connect those users to the global blockchain,” Brody said. “I see this as a key step forward in connecting the world’s largest economies through blockchain technology.”