Huobi, the third-largest cryptocurrency exchange in the world, is launching a $1 billion fund to finance Chinese blockchain-related startups. The move signals an effort to support the blockchain industry in China following a sweeping set of bans that effectively ended domestic cryptocurrency trading in the country.
The fund is a collaborative effort with Tinya Community Network Technology, a social networking platform based in Hainan.
According to a blog post by Huobi, the two companies are planning to form a “Global Cultural and Creative Blockchain Lab.” Huobi is also reportedly planning on moving its headquarters from Beijing to Hainan, further solidifying the strategic partnership.
Hainan Emerges as a Hotspot for Economic Innovation
Relocation to Hainan also offers some other strategic benefits. According to a report by the South China Morning Post, Chinese President Xi Jinping launched a plan to convert Hainan into a free-trade port, a move that could make the region fiercer competition for nearby trading hotspots Hong Kong and Singapore.
Xi has set his sights on Hainan as the countries “biggest special economic zone,” saying that the region’s geography and climate make it particularly well-suited to test out measures for economic 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,” reads Huobi’s blog post.
Huobi Moves Forward in the Face of Restrictive Regulation
Katt Gu, managing director at iBlock, said that “although China has banned ICOs, there are tons of blockchain-related projects like decentralized gaming apps being developed in China that have not issued ICOs. Huobi has set up the fund to invest in these promising projects as it doesn’t want to miss out on the trend.”
After the Chinese government outlawed domestic cryptocurrency exchanges in the last months of 2017, Huobi was forced to relocate some of its operations to Singapore. Since then, the company has begun the process of opening up offices in San Francisco. The exchange also recently announced plans to establish offices in London.
“Not Malta, not Switzerland. Absolutely London, more precisely Britain, is the entry point for the European market for us,” said Vice President of the Huobi Group, Hu Peng.
Chern Chung, Huobi’s senior business development manager for Europe, said that the establishment of offices in London “shows Huobi’s commitment and determination to go mainstream,” and that “we are not afraid of regulation nor are we escaping regulation.”