Huobi Labs and Tianya Community, working in cooperation with the government of China, have created a $1 billion USD global blockchain industry fund. The companies jointly signed a strategic cooperation agreement in the Special Economic Zone of Hainan Province, China.
According to a blog post by Huobi, this is part of a national-level strategy in China that President Xi Jiping himself has personally planned, deployed and promoted.
Hainan Province is a unique area of the country. The Hainan Special Economic Zone (SEZ) is part of the economic reforms and policy of opening China to the world between 1980 and 1984. Other SEZs include Shantou, Shenzhen, Zhuhai in Guangdong Province, and Xiamen in Fujian Province. In these areas, the economy is more free-market oriented, with flexible economic and governmental policies, to draw in foreign and domestic investors.
Huobi China considers itself to be a patriotic Chinese company. They plan to use Huobi Group’s technology, resources, staff and capital to drive global blockchain-related insustries. In so doing, they will also contribute to the development of Hainan SEZ.
With the agreement signed, the two companies have laid out several points of their plan for 2018:
- Huobi China headquarters (Not Huobi Global, Nor Huobi.Pro) will be moved to Hainan, to be settled in Hainan Ecological Software Park.
2. Collaborate with top global industry companies to build 10 GlobalBlockchain+ labs.
3. Build a global top blockchain research institute with the world’s top universities.
4. Build 40,000 square meters blockchain incubator.
5. Initiate a billion-dollar global blockchain industry fund.
Assuming that the project is a success, this large amount of funding injected into blockchain startups could lead to a tipping point in China’s dominance in cryptocurrency and blockchain-related industries. Mining was prevalent in China for a long period of time, due to their low electricity costs. With Huobi and Tianya’s new fund, the country will logically expand their hegemony in this industry to include higher level technological development, far beyond Bitcoin mining.
While the latest tech news describes version 2.0 of the Space Race, between Elon Musk and Jeff Bezos, there is another race going on, in the field of blockchain technology. Where Musk and Bezos are looking to send objects to Mars and other places in outer space, blockchain companies are seeking to send their creations to the moon, figuratively. If China beats the United States in this field, it may have further economic leverage on a global scale. In a currency war, countries seek to gain trade advantage over one another by driving their own exchange rates down, in relation to other currencies. As its exchange rate falls, exports to other countries become more competitive, while imports become more expensive.
Cryptocurrency wars, and technology wars between countries and regions may be thought of along similar lines. A blockchain company with access to $1 billion in funds will likely run circles around a start-up with little to no funding, and an unfriendly regulatory environment. Government organizations in the US, as well as private companies should take notice of this billion dollar fund, if for no other reason than to pay attention to the level of resources that competitors in countries like China have, versus what’s available in the United States, in terms of cash and the freedom to innovate.