$1.6 bln Blockchain Fund to Support Startups With a 30% Inflow From Chinese Gov’t

$1.6 bln Blockchain Fund to Support Startups With a 30% Inflow From Chinese Gov’t

It is tough for crypto-enthusiasts to survive in China, which has already shut local cyber money bourses as well as announced the taboo on ICOs. Neither it is easier to survive for  crypto-miners in China, as the country declared war against excessive electricity use, related to cryptos.

Nevertheless, the blockchain industry there has more chances to survive there in view of the funding that the niche can get. This week it has become clear that startups, working on the blockchain, might get a significant financial back-up in the communist country.

Promising Future For Chinese Startups

On April 9, there was set off the Xiong’An Global Blockchain Innovation Fund with 10 bln yuan (or $1.6 bln) to support green projects, being run in the blockchain-ecosystem.

According to Sohu.com, the local media online outlet, it was announced about the fund’s launch at the opening ceremony of the Hangzhou Blockchain Industrial Park in China. This park is known for being a sort of “sitting” of startups. It is situated in one of the largest technological hubs in the country – Hangzhou in Zhejiang province, which also appears to be the homeland of Alibaba.

The Arm of The Chinese Gov’t in The Blockchain

There were three parties which founded the fund in conjunction:

  • the Yuhang District Government
  • the Future Science and Technology City Administrative Committee
  • the Hangzhou Yanqi Investment Management Co

As you can see, there are representatives of the Chinese gov’t involved in the creation of a blockchain-friendly project. In particular, these governmental bodies piled into the find enough, so their funds made up 30% of the entire investment in the fund.

Moreover, Hangzhou representatives of the gov’t ranked blockchain tech trend behind AI as well as virtual reality technologies. Therefore, it literally praised the blockchain.

Interestingly, this all is not the only relation of the Chinese gov’t to the case. The announcement about the launch of the fund was made a few weeks after the Investment Association of China (IAC) – the gov’t-allied organization – canceled its intentions to set off the center of the blockchain financial support. That happened because of fundamental structural misunderstandings.

Who Will Run The Fund?

It is noteworthy that the role of the blockchain fund’s advisor will be playing Xu Xiaoping – one of the most fanfared angel investors in China. He is the constitutor of ZhenFund, which is a venture capital firm known for piling into Lino and Stream (other blockchain projects) .

Li Xiaolai, in his turn, will be managing the fund. Li is considered to be an outstanding BTC investor and widely accepted opinion leader in the crypto-ecosystem.

What Are The Perspectives?

It is not the first time when various companies in China provide support for blockchain startups and projects. For instance, two months ago JD.com – the e-commerce contender of Alibaba – declared it was going to establish a novel accelerator program for blockchain startups and AI.

Prior to that, in fall 2017, the state-owned Bank of China (not the central one) applied for getting a patent for a process for blockchain nets scaling.

However, all of these companies will have to deal with the ambiguity in the Chinese regulatory field.