China’s Huobi launches US$1 billion blockchain fund to bolster domestic business
China’s Huobi, the world’s third-largest cryptocurrency exchange, has announced it is setting up a US$1 billion fund to finance domestic blockchain-related start-ups, in a bid to bolster its operations in the country after shutting down renminbi-to-bitcoin trading last year.
Cryptocurrencies are digital assets designed to function as a medium of exchange and use cryptography to secure transactions. A blockchain is a digitised, decentralised public ledger of all cryptocurrency transactions and bitcoin has become the world’s largest digital currency.
The blockchain fund will be co-launched with Tianya Community Network Technology, a Hainan-based social networking platform. The two companies will build a “Global Cultural and Creative Blockchain Lab”, Huobi said in a blog post on its official website. Huobi also announced plans to move its headquarters from Beijing to Hainan. Huobi didn’t immediately reply to a request for comment.
Hainan island is China’s smallest and southernmost province. Last month President Xi Jinping announced a plan to turn Hainan into a pilot free-trade port, which could see it challenge competitors such as Hong Kong and Singapore. Xi also highlighted Hainan’s advantages as China’s biggest special economic zone, its geography and climate as reasons why it should be a test bed for further reform.
“Against the background of the new era of Chinese socialist characteristics, we have given Hainan’s Special Economic Zone a new mission of economic reformation. It is a national-level strategy that President Xi Jinping personally planned, deployed and promoted,” Huobi said in the April 30 post.
Founded in 2013, Huobi quickly became one of the two biggest cryptocurrency exchanges in China, the other being OKCoin. Huobi’s exchange supports dozens of cryptocurrencies and digital assets and had a total trading volume of US$1.7 billion in a recent 24-hour period, according to data from CoinMarketCap. The Huobi platform has a footprint in 130 countries.