Crypto in Hong Kong advances with the launch of two new firms backed by Chinese government 

Crypto in Hong Kong advances with the launch of two new firms backed by Chinese government 

Two cryptocurrency investment funds have been established in Hong Kong with support from China Pacific Insurance Company (CPI), one of the top insurers in China. The commercial decision was made despite unfavourable regulatory attitudes towards the mainland market and in light of the region’s aim to become a hub for digital assets.

CPI is the second-largest property insurance firm in mainland China, after the People’s Insurance firm of China, and is owned by the Chinese government, the Shanghai government, and China Securities Finance.

The People’s Republic of China’s central government has been harshly policing cryptocurrency-related activities, but there have been hints that Beijing supports Hong Kong’s goal to develop into a significant centre for digital assets. According to recent reports, China’s state-owned banks are welcoming new crypto firms.

A global investment company called Waterdrip promotes blockchain-based initiatives and cryptocurrency startups like Polkadot, among others. With the help of Waterdrip Capital, the group has established two investment funds in the Special Administrative Region that will concentrate on blockchain technology and the sector centred around crypto assets.

Pacific Waterdrip Digital Asset Fund I, a venture capital fund that will concentrate on investments in blockchain initiatives in their early stages, is said to be one of the new cryptocurrency funds. Proof-of-stake, or PoS, digital assets will allegedly be managed by the second fund, dubbed the Pacific Waterdrip Digital Asset Fund II. 

The report goes along with the Hong Kong government’s growing commitment to building a local cryptocurrency infrastructure and sets Hong Kong’s approach to cryptocurrency regulation apart from China’s, which will impose a crypto ban in 2021. Online reports from the end of March indicated that Chinese state-owned banks appeared to be becoming more interested in some Hong Kong-based cryptocurrency businesses. 

This particular initiative looks to give investors more diverse and creative funding choices. Institutional investors like family offices and companies as well as high-net-worth individuals will be included in the target set of funds. In addition to this, the recent plans set by regulators to license firms by June of this year will make Hong Kong an ideal location for investors.  

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