The US-China Strategic Divide on Blockchain In the United States, blockchain is predominantly associated with cryptocurrency, with policy debates focusing on investor protections, regulatory conflicts, and sensational stories involving meme coins and market failures—overshadowing the broader technological promise. Contrarily, China banned cryptocurrencies outright in 2021 but has since made substantial state-backed investments in blockchain, integrating it as a core component of its national digital and geopolitical strategy. This contrasting approach has raised concerns in Washington; Representative Raja Krishnamoorthi warns that China’s systematic drive to control blockchain infrastructure could grant the Chinese Communist Party (CCP) unprecedented global influence. While the US and China fiercely compete in AI and semiconductors, China is advancing early and strategically in foundational blockchain infrastructure, an area where US engagement remains relatively limited. This growing gap risks forging a global digital architecture increasingly shaped by Chinese standards, governance models, and strategic interests. Blockchain technology is essentially a distributed ledger: a secure, timestamped digital record shared among participants without a central authority. Though best known for enabling decentralized cryptocurrencies like Bitcoin, blockchain’s utility extends much further. For example, in global supply chains—such as smartphone components made in Taiwan, assembled in Vietnam, and shipped to the US—blockchain can unify fragmented, incompatible systems used by suppliers, factories, shippers, customs, and retailers. This shared ledger enables nearly instant verification of transactions, drastically reducing processing times from weeks to hours and cutting operational costs by as much as 80%. Beyond logistics, blockchain promises trusted shared infrastructure across diverse domains. It can offer immutable product provenance for consumers, ensuring claims about sourcing and safety; enable direct, accountable delivery of public benefits and disaster aid, minimizing fraud; and empower individuals to own and control digital identities and data, sidestepping large tech platforms. According to PwC, blockchain’s economic impact could surge from $66 billion in global GDP in 2021 to $1. 76 trillion by 2030. China’s National Blockchain Strategy and Mobilization Blockchain redefines online operations by enabling trust, value exchange, and coordination without central intermediaries. While Western debates linger over regulation, China pursues strategic deployment. In 2019, President Xi Jinping emphasized “seizing the opportunities” in blockchain, calling it vital for “the next round of technological innovation and industrial transformation, ” and signaling China’s ambition to become a global “rule-maker. ” This situates blockchain as a key front in China’s broader drive to influence global technology governance. China’s leadership swiftly embedded blockchain into the 13th and 14th Five-Year Plans, elevating it as a national infrastructure priority. In January 2024, China announced a $54. 5 billion blockchain roadmap outlining funding, goals, and institutional roles needed to accelerate nationwide adoption. Central government bodies like the Ministry of Science and Technology guide industrial strategy, while state-owned giants in telecommunications (China Mobile), finance (China UnionPay), and energy (State Grid) incorporate blockchain into core operations. Leading tech firms Alibaba, Tencent, and Huawei develop blockchain platforms aligned with national priorities for government and commercial use. This comprehensive approach extends to talent development: major universities offer dedicated blockchain programs, and Beijing’s National Blockchain Technology Innovation Center aims to train over 500, 000 professionals. Local initiatives, e. g. , Shenzhen’s blockchain vocational certifications tied to residency benefits (hukou), further stimulate adoption. China’s blockchain push is systemic, not experimental. Unlike its AI and 5G advances—which face Western export controls and bans—blockchain infrastructure developments have drawn less pushback, affording China a race to set global standards before broader international engagement. Chinese entities filed over 90% of global blockchain-related patents in 2023, underscoring this dominant momentum. China’s Blockchain Service Network (BSN) At the core of China’s blockchain ambitions is the state-backed Blockchain-based Service Network (BSN), launched in 2020. BSN offers a standardized, low-cost platform for deploying blockchain applications worldwide, acting as a “digital Belt and Road. ” Led by Red Date Technology and backed by state affiliates like the State Information Center, China Mobile, and China UnionPay, the network has grown extensively: over 120 city nodes operate across China, while the international BSN Spartan version expands into the Middle East, Africa, and Southeast Asia. By early 2025, BSN nodes existed in more than 20 countries, supporting blockchain-based smart cities, trade ecosystems, and digital identity frameworks. BSN’s significance lies not only in scale but ambition. Red Date CEO He Yifan envisions blockchain becoming the backbone of all information systems within decades. BSN project Secretary General Tan Min explicitly aims to build an internet infrastructure where “China controls the right to internet access. ” BSN embodies China’s distinct deviation from Western blockchain ideals of decentralization and anonymity. It employs a permissioned system with known validators and state-aligned governance, enforcing strict controls including mandatory real-identity registration, compliance with state content and security rules, and technical powers to rollback or halt transactions.

Such features contradict Western values of immutability and censorship resistance, reflecting China’s strategy to harness blockchain’s benefits while embedding centralized control. Strategic Implications of BSN Expansion China’s global BSN expansion lays the foundation for a blockchain ecosystem aligned with Chinese technical standards, governance principles, and strategic interests. Where many nations explore isolated projects, China offers a comprehensive infrastructure stack with integrated development tools and preset rules. This is more than exporting technology; it embeds Chinese norms and long-term dependencies into other countries’ digital infrastructures, mirroring Huawei’s global 5G role. First, BSN offers avenues for data access and operational insight. Though BSN nodes abroad operate locally, operators like Red Date Technology fall under China’s cybersecurity and National Intelligence Laws, enabling Beijing to compel data sharing for national security, raising concerns about data exposure on BSN platforms. Second, BSN underpins China’s Digital Silk Road initiative, linking Beijing with global partners. Reliance on a single national source for core infrastructure creates dependency risks. For example, Tanzania’s national broadband network was engineered by a Chinese firm to be compatible only with Huawei equipment, restricting future options. This “vendor lock-in” and diminished technological sovereignty pose vulnerabilities to nations integrating BSN deeply, should it become the global digital backbone China envisions. Third, BSN facilitates export of Chinese digital governance models, including censorship and surveillance. China actively promotes these capabilities among Belt and Road countries, conducting training for officials from nations such as Morocco, Egypt, and Libya. These often precede adoption of repressive cybersecurity laws modeled on China’s, signaling subtle advancement of state control over digital spaces through infrastructure adoption. China also pursues influence over global blockchain standards. Its officials and firms participate actively in organizations like the International Telecommunication Union and International Organization for Standardization. A Tencent-led blockchain proposal became the first UN blockchain standard, evidencing rising Chinese sway. Diplomatic forums push the BSN as part of a modernization package, combining infrastructure, training, and governance templates. This fosters a bifurcated global digital ecosystem, with countries adopting Chinese protocols—and their attendant long-term geopolitical influence. Blockchain and China’s Financial Ambitions China’s blockchain vision is tightly linked to reshaping global finance and circumventing Western-controlled chokepoints. Project mBridge exemplifies this: a blockchain platform developed collaboratively by central banks of China, Hong Kong, UAE, Thailand, and Saudi Arabia to enable direct settlements using central bank digital currencies (CBDCs). It aims to bypass traditional correspondent banking and the SWIFT system, offering alternative payment rails. Its recent achievement of a functional Minimum Viable Product marks a key step toward parallel financial infrastructure independent of Western oversight. While mBridge targets cross-border payments, the BSN can embed China’s digital yuan (e-CNY) into domestic economic activities. Since the BSN forbids independent cryptocurrencies within China, blockchain-based services needing payments—such as automated utility billing—would default to the e-CNY, facilitating the digital yuan’s wider normalization in China’s blockchain ecosystem. Together, mBridge and the BSN–e-CNY integration form part of a deliberate strategy to build alternative financial infrastructure resilient to external pressures and capable of projecting Chinese economic influence. Though unlikely to supplant the US dollar globally soon, this infrastructure provides Beijing with potent new economic statecraft tools. The 2021 digital boycott of H&M in China—after the retailer cited Xinjiang labor issues—illustrates this power: H&M was swiftly removed from critical domestic digital platforms, collapsing its Chinese market access. While this was domestic, similar dependency on BSN globally could grant China analogous leverage internationally by embedding chokepoints in foundational blockchain architecture, offering strategic influence independent of dollar dominance. Conclusion China’s blockchain strategy is a comprehensive, state-driven, long-term campaign to build critical digital infrastructure for the future. While Western focus has centered on cryptocurrency regulation, China has methodically constructed the underlying platforms enabling future commerce, governance, and value exchange. For the US and its allies to effectively compete, they must first recognize the full scope, ambition, and systemic nature of China’s blockchain approach, then urgently develop a coherent counterstrategy to address this emerging digital landscape.