China Is All Set to Launch Its First Blockchain Exchange Traded Fund (ETF)
During the last quarter of 2019, China has seen a major surge in blockchain development in the country. The Chinese government authorities have been upfront and vocal about these developments and are encouraging local companies and tech giants to join them.
In the latest development, China is all set to launch its first exchange-traded-fund (ETF) that is backed by blockchain-related stocks. Last Thursday, December 26, the Shanghai Securities News reported that the financial watchdog - China Securities Regulatory Commission (CSRC) - has received an application for an blockchain ETF.
The Shenzhen-based asset management firm Penghua Fund has filed this application dubbed as the Penghua Shenzhen Stocks Blockchain ETF. This ETF will track the performance of blockchain-related stocks listed on the Shenzhen stock exchange.
Recently, the Shenzhen Stock Exchange has rolled out a Blockchain 50 Index comprising of 50 stocks listed on the exchange who have entered the blockchain space. The 50 stock indices comprises of banks, FinTech companies, internet companies, software companies, etc.
The accelerated blockchain development in China comes soon after President Xi Jinping asked his country to seize the opportunity riding the next wave of technological disruption. Xi said: “We must take the blockchain as an important breakthrough for independent innovation of core technologies. [We must] clarify the main direction, increase investment, focus on a number of key core technologies, and accelerate the development of blockchain technology and industrial innovation.”
China is also actively working on the development of its central bank digital currency (CBDC), the Digital Yuan. China’s central bank - People’s Bank of China - has also set up a dedicated research institute which will work on the digital currency development. China’s internet giant Tencent is reportedly working on its own Digital Currency Research Group.
Although there have been multiple news making rounds about China’s accelerated blockchain developments, a local Chinese media outlet called it a hype. The media publication reported that many companies are just using the blockchain tag to get benefits of business momentum and financial gains. The actual number of blockchain companies is less than 10% of what has been claimed.