Chinese state company launches crypto funds
It has been claimed that a large state-owned corporation in China would be creating new cryptocurrency funds, which indicates the company has a more optimistic position on the sector than was previously believed. According to a local news outlet that focuses on technology, 36Kr, CPIC Investment Management, which is a subsidiary of China Pacific Insurance (CPI), is teaming up with investment company Waterdrip Capital to develop two cryptocurrency investment funds.
CPI is the second-largest property insurance firm on the Chinese mainland, and it is owned by the Chinese central government, the government of the Shanghai city government, and China Securities Finance. Both of the new crypto funds, known as the Pacific Waterdrip Digital Asset Fund I and the Pacific Waterdrip Digital Asset Fund II, are venture capital funds that will handle proof-of-stake digital assets. These funds were created by the same company. Investors from institutions as well as rich individuals will be sought for by both funds.
Blockchain-related initiatives and cryptocurrency firms might get financial backing from the international investment firm known as Waterdrip Capital. It was established in 2017, and it is well-known for its support of the Chinese cryptocurrency mining business as well as its investments in initiatives such as Peaq, a decentralized Web3 network built on Polkadot.
According to a tweet posted by Waterdrip Capital on Monday, the launching of two joint cryptocurrency funds by CPIC Investment Management and Waterdrip Capital is tied to the adoption of incentive policies relating to virtual assets by the Hong Kong government. The statement was sent in response to Waterdrip's announcement that it will be partnering with CPIC Investment Management to create the funds.
This revelation comes at a time when the government of Hong Kong is becoming more dedicated to establishing local cryptocurrency infrastructure. In doing so, the government hopes to differentiate its approach to cryptocurrency regulation from China's prohibition on cryptocurrencies, which will be imposed in 2021. At the end of March, there were rumors circulating online that Chinese state-owned banks were showing interest in several cryptocurrency companies based in Hong Kong.
In recent years, the government of China has taken a harsh position against cryptocurrencies, with prohibitions placed on initial coin offerings, cryptocurrency trading platforms, and mining operations, among other cryptocurrency-related activities. The fact that a state-owned corporation has decided to offer cryptocurrency funds, on the other hand, points to a more bullish picture for the sector.
China has been hard at work developing its very own kind of digital money, which it refers to as the digital yuan, and it is now undergoing testing in a number of different places. China's bigger objective is to become a leader in the digital economy and to minimize its dependency on the US currency. One step toward achieving this goal is the creation of the digital yuan.
In spite of China's past position on cryptocurrencies, this action by a state-owned corporation implies that China's views about the sector may be shifting. It is not yet clear if other corporations in China will follow this example and form their own cryptocurrency funds or whether this action is an isolated incident.