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Billion dollar Chinese blockchain investment fund launched


On Monday, the ‘Global Digital Bank Consortium Blockchain Investment Fund’ was announced at a forum in Shanghai, China. Cao Tong, the chairman of initiating firm Shenzhen Hande Financial Technology Holdings (HDFH), revealed that the fund will amount to around $1 billion.

Along with HDFH, it was founded by the Zhongguancun Private Equity & Venture Capital Association (ZVCA) and Yillion Bank. The fund will build a blockchain consortium through investing in digital banks and supporting their development. The first investment phase will last for six years, followed by a two-year exit phase.

As Cao put it: “The first step is to invest in and digitally transform a bank. The second step is to build a global digital bank consortium blockchain, with the digitally transformed bank as the main node.”

The firms are well-established in their native China, ‘Zhongguancun’ being named after the country’s Silicon Valley-style tech hub. Both Yillion and HDFH are already members of ZVCA, along with tech giant Tencent.

Meanwhile, Yillion was the first private bank to go live in China’s ‘rust belt’, an industrial area in the north-east of the nation, in 2017. Its two largest shareholders are Beijing investment firm Zhongfa (30%) and a subsidiary of Meituan (28.5%), China’s largest on-demand services provider. Now, it boasts partnerships with JD and Xiaomi Finance.

According to ZVCA, HDFH operates six fintech platforms in enterprise credit, blockchain, cloud services, big data, and digital asset management. Tencent’s WeBank is listed as one of its banking collaborators.

It further has a joint venture, the Global FinTech Lab, which partnered with UK-based consortium FinTech Circle last year. The lab was founded by HDFH chairman Cao with the Chinese University of Hong Kong and the International Monetary Institute of Renmin University, a think tank focusing on the globalization of the yuan.

Cao added: “The fund empowers the targets through investment and fintech transformation, while building an innovative global digital bank consortium blockchain, achieving broader value for the participating digital banks.”

It will first focus on institutions in mainland China, Singapore, and Australia, with plans to explore additional regions.

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