China Securities Regulatory Commission (CSRC) has listed an application on its website, submitted by a company called ‘Penghua Fund’, for the approval of a proposed blockchain-based Exchange Traded Fund (ETF).
At present, the application is in the ‘progress tracking’ (aka ‘pending’) stage, and the CSRC states that it “received materials” from Panghua on December 31, 2019.
Penghua Fund was founded in 1998 in Shenzhen, China and describes itself as an asset management firm. The company manages 80 billion euros (as of June 30th 2018) and is described as “one of the major Chinese asset managers.”
If successful, Penghua’s ETF product could open up the floodgates to institutional investment alongside a rapidly growing retail market in the country.
Conversely: Like with many projects with blockchain or cryptocurrency related fundraising, opportunities in the USA have been somewhat stunted by the actions of federal, financially oriented regulatory bodies: the SEC, FinCEN, and the CFTC. In fact, bitcoin ETFs have been outright banned in the country.
That doesn’t mean that there aren’t any in existance however, such as Reality Shares Nasdaq NexGen Economy (BLCN) ETF, and the Amplify Transformational Data Sharing (BLOK).
Even Goldman Sachs is offering an investment product which advertises its involvement in blockchain oriented projects. Despite this, Sachs’ ‘Motif Finance Reimagined’ ETF is not executed on a blockchain platform.
China has been ramping up its focus towards cryptocurrency activities over the past year, and it’s central bank is known to be working on its own digital currency using blockchain called ‘CBDC’ – which will be pegged to the Chinese Yuan / Renminbi.
Although there are internal projects are being built, strong signs of a domestic blockchain industry emerging have yet to be seen – and in late November, China was reported to have pursued 173 independent criminal cases.
There is some progress however, with state agencies revealing that blockchain will be a key area of focus for its forthcoming business reforms which are scheduled for implementation.
Furthermore, the Chinese government invested in high volumes of the precious metal last year. This coincided with the ongoing trade war between China and the USA, as well as a sanctions imposed against Russia (which also purchased a lot of gold in 2019).
These investments provide economic security in the face of fiat depreciation, much like the ongoing development of legislative and regulatory frameworks for businesses seeking to take advantage of the various opportunities made possible through blockchain technology.
If China were to implement its own cryptocurrencies and blockchain projects, let alone enable domestic businesses to create their own, it could provide even further opportunities for evading U.S. sanctions.
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