Despite China’s critical stances on cryptocurrencies and Initial Coin Offerings (ICOs), the crypto-skeptic government has ramped up its support of blockchain technologies with a CNY 10 billion (USD 1.48 billion) investment fund to support public blockchain projects.

Investing in innovation

On 20 July, at the inaugural Industrial Public Chain Summit (IPCS), the new fund was announced and reported to be formed by the district government of Jiangbei new area in Nanjing city and the Beijing-based Zhongguancun Blockchain Industry Alliance, a cooperative alliance between blockchain companies and government research institutes.

As reported by another local media outlet, the Nanjing government will contribute 30% of the total as a “guiding fund” with the remaining 70% coming from the private sector. According to ZDNet, early beneficiaries of the fund will be the UDAP Foundation, a blockchain asset management startup.

Follow the money

In terms of fund allocation, 30$ will be designated to academic innovations and blockchain startups in their early stages, 40% is to be given to “traditional” industrial companies seeking to utilize blockchain technologies and the remaining funds to be allocated to “discreetly” funded cryptocurrency projects.

The purpose of the new fund is to support newly-developing blockchain technologies for cross-border platforms, healthcare, energy, content, intellectual property and environmental protection.

The ICPS event was attended by Nanjing government officials as well as high-ranking members of the Communist Party of China including deputy secretary Luo Qun. Deputy Chairman of Tsinghua University’s Internet Industry Research Center, Wang Xiaohui, spoke at the summit describing the need for consensus and global cooperation among other needs for the tokenized economy to be a success.

Other attendees included the China Small and Medium Enterprises Association, Jiangsu Bank, Nanjing Bank and other industries with an expressed interest in public blockchain projects, foreign enterprises as well as blockchain industry experts and participants.

A blockchain boost

The fund is not the first of its kind. In April 2018, Shenzhen announced a CNY 500 million (USD 80 Million) blockchain startup fund which came shortly after the city of Hangzhou revealed a gigantic blockchain venture capital fund of USD 1.6 billion.

Furthermore, in July, data aggregator Qixin.com reported a six-fold increase of companies with “blockchain” in their name, catapulting from 555 in 2017 to 3,078 at the time of reporting. Comparatively, there are 817 companies in the US and 335 in the UK using blockchain in their registered names.

As reported by Forbes, China is leading global blockchain patent applications. In 2017, over half of the 406 patents filed were from China, which is another indicator of China’s aims to become a global leader in the nascent industry.

 

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