CreditEase invests $60 million in Circle, blockchain may become a hot spot for private equity competition

Half a year ago, private equity had an ambiguous attitude towards blockchain technology institutions. Half a year later, global private equity has begun to secretly take such technology companies as their investment targets. Even CreditEase, which has always been known for its wealth management, has established its own private equity fund to invest in blockchain technology companies.

On July 15, at the CreditEase Wealth Forum held in Shanghai, CreditEase CEO Tang Ning revealed that it had invested in Circle, the world's first blockchain technology company to obtain a digital currency license from the New York State Department of Financial Services. The company received a Series D financing led by IDG earlier this month, with CreditEase being one of the follow-up investors with an investment amount of US$60 million.

Not only that, China Times reporters also learned from multiple interviews that domestic private equity capital has invested in a number of blockchain technology companies, with these investments ranging from millions of yuan to tens of millions of yuan.

Blockchain companies that are favored

"Blockchain technology is becoming increasingly important to banks, many Internet finance and financial technology companies, and regulators in various countries. Our new financial industry investment fund's investment is also a kind of investment innovation, which is viewed from the perspective of investing in the future. Of course, we carefully select the team and the model, and we strongly agree with them. It is not a gamble." Tang Ning said in an interview when talking about investing in this American blockchain organization and the prospects for the development of blockchain technology.

The reporter learned that the widespread application of blockchain technology in the financial industry has become a consensus in the industry, but there are no public application scenarios yet.

"In China, I haven't seen any nascent cases in this area. International applications of blockchain technology are mainly supported by the blockchain technology behind Bitcoin transactions. I think there is still a long way to go before banks and financial institutions can use blockchain technology to improve efficiency, reduce costs and facilitate transactions. On the other hand, many blockchain labs are now targeting the B-side, that is, they are talking to large institutions about technical solutions. The resource reserves of small startups are worth paying attention to," said Tang Ning.

In fact, in addition to investing in Circle, the reporter also learned that CreditEase's other recent investment is targeting Trade Shift, a global procurement and supplier interconnection platform company. CreditEase's investment in this institution aims to use Trade Shift's service data to provide financial solutions for small and medium-sized enterprises. On the other hand, after the financial service needs of merchants are met, they will do more transactions on Trade Shift.

It is worth noting that just the day before, Hong Kong media reported that BOC Hong Kong and the Applied Science and Technology Research Institute have jointly established an innovation center, which is expected to become the first Hong Kong bank to use blockchain technology. Zheng Songyan, general manager of the Information Technology Department of BOC Hong Kong, said that he hopes to use blockchain in the mortgage process as soon as half a year, including the transmission of important documents to ensure the accuracy of the documents. Zheng Songyan also said that the Hong Kong Monetary Authority is also involved in the application research, and the HKMA must also approve it before launching the service.

In addition to Bitcoin, the most representative application of blockchain technology is banks. So far, more than 50 banks around the world are developing and applying blockchain technology. Industry insiders said that banks' application of blockchain technology is just the tip of the iceberg. In the fields of securities, payment, land registration, investment and financing, logistics, etc., the application and development of blockchain technology has been carried out.

Keep it a secret

According to the reporter, before the regulatory authorities had a completely clear attitude towards blockchain technology, many financial institutions had already begun to study the application scenarios of blockchain.

"There is an institution in Shanghai that specializes in blockchain technology development. It has developed blockchain technology for a large domestic aviation group and has already been applying it." An industry insider revealed to reporters.

At the first Global XIN Charity Conference held in Hangzhou on July 9 this year, Alibaba's Ant Financial announced that it is actively exploring the use of blockchain technology to track the whereabouts of public donations.

"Blockchain technology is a new technology that promotes trust and enhances openness and transparency. On the Alipay charity donation platform, users often donate money ranging from a few yuan to several hundred yuan, and the donations cannot be tracked after they enter the charity project account. Using blockchain technology, the life cycle of each payment is recorded on the blockchain, and users can continue to trace it." In this regard, a relevant person from Ant Financial told reporters.

In the eyes of private equity market professionals, the investment value of blockchain companies lies in the fact that the technical support they provide can change the transaction patterns of various industries. In the financial industry, if blockchain technology is combined with auto insurance and claims, then the insurance records and claims records of each vehicle will be recorded and disclosed on the same platform, which can greatly reduce the occurrence of insurance fraud and collusion between insiders and outsiders to obtain insurance premiums, which will undoubtedly be of great help in reducing the cost of the auto insurance industry. For inter-bank bill transactions, the application of blockchain technology also makes the acceptance transaction of each bill open and transparent, so as to avoid the occurrence of false bill transactions between banks.

"This is where the investment value of blockchain technology companies lies. Although large-scale application scenarios of blockchain technology will take time, this trend is irreversible. The valuation of blockchain technology will inevitably increase rapidly in the future as application scenarios expand. Now should be the best time for private equity to invest in blockchain technology companies." Chen Jie, partner of Shanghai Gaorong Capital, made an optimistic prediction when interviewed.