The US-China Strategic Divide on Blockchain
In the United States, blockchain remains largely synonymous with cryptocurrency. Policy debates often circle around investor protections, regulatory turf wars, and headlines about meme coins and high-profile collapses that obscure the technology's potential. China, however, is charting a very different course. Despite decisively banning cryptocurrencies in 2021, Beijing is making massive state-backed investments in blockchain technology, positioning it as a central pillar of its national digital and geopolitical strategy. This divergence is beginning to register in Washington, with Representative Raja Krishnamoorthi recently warning that China's methodical push to dominate blockchain's underlying infrastructure could grant the CCP “unprecedented influence globally.” His observation underscores a broader dynamic: while the United States and China compete intensely over AI and semiconductors, Beijing is making early, systematic gains in foundational blockchain infrastructure, a domain where focused U.S. engagement remains comparatively limited. This widening gap risks creating a global digital architecture increasingly shaped by Chinese standards, governance models, and strategic interests.
At its core, blockchain is a distributed ledger technology: a secure, time-stamped digital record book shared among multiple parties. It allows participants to verify transactions and share data reliably without needing a single central authority. While this architecture is most widely known for powering decentralized cryptocurrencies like Bitcoin, its value extends to any environment where multiple actors must coordinate across fragmented systems. Consider the journey of a smartphone component sourced in Taiwan, assembled in Vietnam, and shipped to the United States. It passes through numerous hands: component suppliers, assembly factories, shipping firms, customs agents, and distributors, each using disparate and often incompatible systems. Verifying delivery or processing payment can involve weeks of delays and disputes. By providing a trusted digital record visible in near real-time to all authorized parties, a shared blockchain could replace these disparate systems. As each step is completed and logged on to the shared ledger, verification can happen almost instantly, slashing transaction times from weeks to hours and cutting operational costs by up to 80%.
Beyond logistics, this potential for shared, trusted infrastructure holds broad promise. In consumer markets, blockchain offers an unalterable log detailing a product's journey, enabling verifiable proof of claims regarding proper sourcing or safe handling. For public services, it enables the direct, traceable delivery of benefits or disaster aid, enhancing accountability and reducing potential fraud. In the digital realm, blockchain creates possibilities for individuals to directly own and control their own digital identities and data, rather than having them managed by large tech platforms. The projected economic impact of harnessing such potential is staggering: a PwC report estimated that the net global GDP boost from blockchain applications could swell from roughly $66 billion in 2021 to $1.76 trillion by 2030.
China's National Blockchain Strategy and Mobilization
Blockchain offers a fundamentally new way to operate online: guaranteeing trust, exchanging value, and coordinating complex systems without relying on traditional central platforms. Yet while the West continues to debate how to regulate this technology, China is already strategically building with it. In 2019, President Xi Jinping delivered a speech urging the nation to "seize the opportunities" presented by the technology. He framed blockchain as crucial for the "next round of technological innovation and industrial transformation," declaring China's intent to become a global "rule-maker." This positions blockchain as a key front in China's broader quest to shape global technology governance.
Following these high-level directives, China mobilized its system with characteristic coordination. Blockchain was embedded in both the 13th and 14th Five-Year Plans, elevating it to a national infrastructure priority. Cementing this strategy, the government this past January unveiled an ambitious $54.5 billion national blockchain roadmap, detailing the funding commitments, performance targets, and institutional responsibilities necessary to accelerate deployment across the economy.
This high-level policy translates directly into coordinated action. Central bodies like the Ministry of Science and Technology steer industrial strategy, while state-owned giants, spanning telecommunications (China Mobile), finance (China UnionPay), and energy (State Grid), are actively integrating blockchain into their core operational infrastructure. Meanwhile, China's tech titans, including Alibaba, Tencent, and Huawei, are building out powerful blockchain platforms engineered for both government deployment and commercial application, ensuring alignment with national strategic objectives.
This synchronized effort extends to human capital. Major universities have established specialized blockchain programs. The National Blockchain Technology Innovation Center in Beijing was tasked with training more than 500,000 blockchain professionals. Local incentives drive further adoption; in cities like Shenzhen, vocational blockchain certifications are tied to social benefits like residency eligibility (hukou).
The picture emerging is one of systemic prioritization, not tentative exploration. While China's advances in AI and 5G are met with strong Western pushback—including export controls and network bans—its parallel drive in blockchain infrastructure has yet to provoke a similar response, which could help Beijing set the de facto rules before other countries fully engage. This ambition is also backed by sheer volume: Chinese entities dominate global blockchain innovation, filing over 90% of all blockchain-related patents in 2023.
China's Blockchain Service Network (BSN)
Central to China's global blockchain ambitions is the state-backed Blockchain-based Service Network (BSN). Launched in 2020, this initiative provides a standardized, low-cost platform for deploying blockchain applications globally, effectively serving as a 'digital Belt and Road.' It is led by the private firm Red Date Technology, backed by powerful state-affiliated entities like the State Information Center, China Mobile, and China UnionPay, and explicitly designed for worldwide reach. The network is already expansive. Over 120 public city nodes, which function as data centers providing access to the BSN platform, operate across China, while the international version, BSN Spartan, is expanding into the Middle East, Africa, and Southeast Asia. By early 2025, this global expansion had already established BSN nodes in over 20 countries, designed to provide the foundation for blockchain-based smart cities, trade ecosystems, and digital identity systems.
What makes the BSN especially significant is not just the scale, but its stated ambition. Its leaders describe it as generational infrastructure. He Yifan, CEO of Red Date Technology, predicts that within decades, all information systems will rely on blockchain transmission. Tan Min, the project’s Secretary General, described the goal more explicitly: building an internet backbone where “China controls the right to internet access.”
Crucially, the BSN embodies China's divergent approach from Western permissionless ideals like decentralization and anonymity. It exports "blockchain with Chinese characteristics," a permissioned system with known validators and state-aligned governance that enforces strict controls. These include mandatory real-identity registration, adherence to state content and security standards, and technical powers for transaction rollback or shutdown. Such state-enabling features fundamentally contradict Western blockchain values like immutability and censorship-resistance, reflecting China's strategy of harnessing the technology's advantages while embedding centralized control.
Strategic Implications of BSN Expansion
As Beijing expands the BSN globally, it is laying the groundwork for a blockchain ecosystem tightly aligned with Chinese technical norms. Where many countries experiment piecemeal, China offers a full-stack alternative, complete with infrastructure, development tools, and pre-defined rules. This global expansion is more than technology export; it is a vehicle for embedding Chinese standards, governance principles, and long-term dependencies into other countries' core digital infrastructure. Like Huawei’s role in global 5G, BSN nodes can anchor critical services within a Chinese-built framework, offering tangible strategic advantages.
First, it offers potential data access and operational insight. While BSN nodes abroad reside locally, operators like Red Date Technology remain subject to China’s cybersecurity and National Intelligence Laws. These frameworks allow Beijing to compel data sharing for national security, raising concerns about the exposure of sensitive data on BSN-based platforms.
Second, the BSN is positioned as the technological backbone for China's Digital Silk Road, designed to link Beijing with its global partners. Relying on such foundational infrastructure from a single national source, however, creates inherent dependency risks. Experiences elsewhere on the Digital Silk Road prove these concerns are tangible: for instance, a Chinese firm engineered Tanzania's national broadband network to be compatible only with Huawei equipment, effectively locking the country into specific standards and limiting future choices. This pattern of vendor lock-in and reduced technological sovereignty highlights potential vulnerabilities for nations deeply integrating the BSN, should it become the core global digital infrastructure Beijing envisions.
Third, the BSN serves as a potential conduit for exporting digital governance models. China actively promotes its model of internet governance, including censorship and surveillance capabilities, finding receptive audiences among many of its Belt and Road partners. Beijing has hosted training sessions on these systems for foreign officials from countries including Morocco, Egypt, and Libya, often followed by the adoption of repressive cybersecurity laws that mirror China's. Adopting Chinese-built infrastructure like the BSN could subtly facilitate similar state control mechanisms over digital spaces.
Complementing its push to export infrastructure and associated governance models, China is actively working to shape global standards. Officials and companies actively participate in standards bodies like the International Telecommunication Union and the International Organization for Standardization. Successes, like a Tencent-led proposal becoming the first UN adopted blockchain standard, signal China's growing influence. Diplomatic forums like BRI and CEEC summits promote the BSN as part of a modernization model where China provides the infrastructure, training, and governance template. The result is an increasingly bifurcated global ecosystem; countries may adopt China's protocols, and with them, quiet but powerful long-term influence.
Blockchain and China's Financial Ambitions
China’s blockchain strategy also deeply intertwines with its ambitions to reshape global finance and bypass Western-controlled choke points. One example is Project mBridge. This blockchain-based platform, collaboratively developed by central banks including those of China, Hong Kong, the UAE, Thailand, and Saudi Arabia, is actively building a direct channel for settling transactions using central bank digital currencies (CBDCs). Its core purpose is to circumvent traditional correspondent banking and SWIFT, the cornerstone of the current Western-led international payments system, by offering alternative payment rails. These rails recently reached a functional 'Minimum Viable Product' stage, marking a significant milestone toward establishing a parallel financial infrastructure independent of established Western oversight.
While mBridge focuses on cross-border settlement, the BSN network provides potential pathways for embedding the e-CNY (China’s digital yuan) into daily economic life. Within China, where the BSN prohibits independent cryptocurrencies, any blockchain-integrated services requiring payment, like envisioned systems for streamlined utility billing, would naturally default to using the e-CNY. The BSN thus acts as enabling infrastructure, paving the way for the digital yuan's normalization across China's expanding blockchain ecosystem.
Viewed together, initiatives like mBridge and the potential BSN-eCNY synergy sketch out a deliberate strategy: constructing alternative financial plumbing resilient to external pressure and capable of projecting influence. Although unlikely to dethrone the U.S. dollar globally soon, this emerging infrastructure provides Beijing with potent new tools for economic statecraft. The 2021 digital boycott of H&M in China offered a glimpse of this power: after the retailer cited Xinjiang labor concerns, it was quickly scrubbed from essential domestic digital platforms, crippling its market access. While executed domestically, it illustrates the coercive potential inherent in controlling critical digital infrastructure. Should nations become reliant on the BSN for core functions globally, Beijing could gain similar leverage internationally by embedding chokepoints not in consumer apps but within the foundational blockchain architecture itself, a powerful form of strategic influence independent of the dollar's current global reign.
China's blockchain strategy is a state-directed, long-term campaign to build foundational infrastructure for the digital age. While Western attention has thus far focused on cryptocurrency regulation, Beijing has been methodically laying the tracks for future commerce, governance, and value exchange. For the United States and its allies to compete effectively in this emerging landscape, recognizing the scope, ambition, and systemic nature of China's blockchain strategy is the essential first step. Developing a coherent counterstrategy is the urgent next one.
