A new $1.6 billion fund has been set up in China to invest in blockchain start-ups. The fund was announced at the opening of the Hangzhou Blockchain Industrial Park in Hangzhou, and will invest in companies being incubated in the park.
The fund is being jointly financed by Hangzhou Yanqi Investment Management Co, the local government and the Future Science and Technology City Administrative Committee. Xu Xiaoping, the founder of venture capital firm, ZhenFund, will act as the fund’s advisor.
“China very much behind blockchain technology”
Hangzhou is already known as a hub for technology and innovation and is home to the headquarters of Alibaba, Netease and a long list of tech start-ups.
The announcement of the fund, and the opening of a centre dedicated to blockchain companies, proves that despite China banning cryptocurrencies and ICOs, the government is very much behind blockchain technology. In March, the outgoing head of the People’s Bank of China, Zhou Xiaochuan, acknowledged the inevitability of cryptocurrencies, whilst also stressing caution.
Analysts are now wondering whether a blockchain hub can succeed in a country that doesn’t allow token sales. Japan is pushing ahead with legislation that it hopes will “establish ICOs as a sustainable financing method” which is likely to create competition for talent in the region.
At the very least, the announcement of the fund can be seen as a vote of confidence in blockchain technology, while Chinese investors are no doubt hoping it will also ultimately lead to the ban on ICOs and cryptocurrencies being lifted.