Fosun bets on blockchain – China’s latest business and technology news

Business & Technology

A summary of the top news in Chinese business and technology for August 23, 2017. Part of the daily SupChina newsletter, a convenient package of China’s business, political, and cultural news delivered to your inbox for free. Subscribe here.

Reuters reports that Fosun Group, one of China’s most active investment conglomerates, has become the “sole investor in the first round of fundraising of Shanghai Distributed Technologies,” a startup dedicated to blockchain, “the much-hyped technology that underpins virtual currencies such as bitcoin.”

  • Fosun sees the potential of “applying the technology across its businesses, which are as varied as financial services and pharmaceuticals.”
  • One possible application of blockchain is the frictionless, secure transfer of medical data and billing information between hospital networks and insurers — see the Nashville-based company Hashed Health for more on this.
  • Earlier this year, Goldman Sachs published a minisite on blockchain, and has invested in developing technologies that could reduce money transfer and transaction costs for both investment and retail banks. For more on blockchain, clearly from a bullish point of view, see this guide on Invest in Blockchain.
  • The Chinese government is encouraging the development of blockchain. Reuters quotes Shanghai-based financial researcher and consultant Zennon Kapron: “The government, regulators and entrepreneurs…see an opportunity for China to really put a stake in the ground and show its development and innovation around blockchain.”

In other cryptocurrency news:

  • Quartz says that “China’s two biggest bitcoin exchanges, Huobi and OKCoin, collectively invested around 1 billion yuan ($150 million) of idle client funds into ‘wealth-management products’” (WMP), which are high-yield but risky funds run by banks and other financial institutions. A run on one of these bitcoin exchanges or the collapse of a WMP could pose a serious risk.
  • Tech in Asia notes that the growing reliance of bitcoin miners on cheap, stable electricity to power their computers means that such companies will have to work closely with the government and be in step with regulators.
  • Today, bitcoin is trading at over $4,000 per coin, up from less than $600 one year ago. (See CoinDesk for bitcoin prices.)