China may have banned crypto trade within its jurisdiction and may have also managed to drive away almost all the crypto exchanges and trading platforms from its territory. However, they are keen to explore the blockchain technology – the very technology on which cryptocurrencies are based.
It has been reported that the Chinese city of Shenzhen has announced its support for an investment fund based on the blockchain technology. This move was announced just a couple of days back at the Blockchain Expo which was hosted by Shenzhen. The China Electronic Commerce Association organized the event. Funds worth $80 million or 500 million yuan will be allocated to blockchain startups in the city during the initial stages of the project.
The Shenzhen Angel Investment Guidance Fund
The Shenzhen municipal government had launched the Shenzhen Angel Investment Guidance Fund, and the authorities have said that they would be financing about 40% of the project by means of a public-private partnership. The private sector will contribute the rest of the funds.
The Shenzhen Daily has said,
“Through market-oriented and professional operation, the fund will give full play to the allocation of market resources and the guiding role of financial funds, and lead social capital to invest in angel projects. The fund will also speed up the cultivation of angel investment and financing in startups, which will boost the development of strategic emerging industries and promote industrial transformation and upgrading.”
Donghai and Star Capital will manage the fund. These are two investment funds that are controlled by the state-owned Assets Supervision and Administration Commission of the State Council.
It has been reported that the blockchain technology initiative by the Chinese Academy of Sciences and the Shenzhen Institute of Innovation and Development will be collecting 100 blockchain seed projects to invest in as the incubation project for the venture capital fund.
The first fund for blockchain related products, the Shenzhen Angel Mother Fund, is going to have a market capitalization of $800 million or 5 billion yuan. This capital would be used for funding various startups in China. It has also been divulged that at least 4% of the funds will be used for domestic blockchain-based projects.