The Chinese are catching up with the Americans in the area of blockchain-related investments, according to a report by New York-based research firm CB Insights.
Researchers found that China accounted for 22% of blockchain investments in 2019, compared to 31% in the United States. This represents a significant improvement for China compared to 2015, where it had a meager 2% while the United States received 51% of total funding, reported Cointelegraph.
Led by the 2019 trade dispute, competition between the United States and China has intensified in recent years. This is not surprising given that they are the two largest economies in the world. At best, however, the results of this CB Insights report only suggest that Chinese-American competition is also intensifying in the blockchain space. This does not give a clear picture of which country is ahead in the development of the blockchain.
In addition, given that there are a multitude of conflicting blockchain investment reports, it is difficult to say with certainty what proportion of global blockchain investment goes to either country. For example, according to CB Insights, 2019 saw a global investment volume of around $ 2.8 billion, up from $ 4.2 billion in 2018.
Earlier this year, Xinhua – the Chinese state-owned financial media company – and the financial data platform Rhino Data reported that Chinese investment transactions amounted to about $ 3.44 billion ($ 24.4 billion). Chinese yuan) on 245 transactions in 2019. This represents a drop of 40.8% in investment volume compared to 2018, the report said.
Experts say the majority of investment in China is sourced locally for now, but they expect more foreign funds in the near future. Kevin Shao of Bitrise Capital Partners said: “Currently, the main investors are mainly national venture capital institutions and individual investors as start-up investors. However, we believe that with the increasing internationalization of blockchain technology, the percentage of foreign investment institutions will increase over time. “
There are no readily available reports focusing solely on the amount of blockchain investments in the United States last year, but again, CB Insights’ figures mainly show that the blockchain scene in China is straightens. Instead of looking at the numbers, it might be useful to look at actual events, including government position, talent distribution and corporate participation, to get an idea of how blockchain competition is forming between the two. country.
In October 2019, Chinese President Xi Jinping publicly supported blockchain technology by urging the country to “take blockchain as an independent innovation of major disruption to basic technologies” and accelerate its development. According to blockchain accelerator Consensys, China has more than 500 registered blockchain projects, most of which are government-led.
As part of its support for the blockchain, the People’s Bank of China – the country’s central bank – is working to launch a digital yuan, which will be powered by a centralized blockchain. According to reports, the central bank has completed most of the development of digital currency and is in the process of drafting legislation for its dissemination.
The Chinese government’s position, led by President Xi’s speech, has had two effects on the blockchain development scene in the country. First, it set the course for the industry. Second, it generalized the status of the blockchain and fostered its orderly development, thereby opening up more opportunities for new players. Qi Qi, CEO of blockchain incubator B-Labs, said: “On the capital side, traditional national funds are more willing to get involved, paying particular attention to the area of industrial blockchain, which is a great breakthrough for traditional funds and the blockchain industry itself. “
Simon Li, founding partner of Chain Capital, told Cointelegraph that “the Chinese government is actively embracing blockchain and will use it in the government business system to create many application scenarios.”
The US government has a slightly more cautious approach to blockchain. As a few government agencies – mostly military – explore the use of blockchain in the country, it is still difficult to say that the government is particularly pro-blockchain, which could limit the flow of blockchain investment in the country. . Speaking to Cointelegraph, Sukhi Jutla, co-founder of MarketOrders – a blockchain platform for the jewelry industry – said: “Although the United States is still a key leader in blockchain investment , they cannot compete with China. The United States is hampered by slow regulations that do not keep pace with technological innovations. China is able to move quickly because their governments allow them to do what they need to. “