Digital Assets: A Chinese Blockchain ETF May Soon See The Light of Day

January 3, 2020 | Digital Assets, News

Chinese asset manager Penghua applied on Christmas eve to float a blockchain ETF.

Shenzen-based fund manager Penghua Fund applied to China’s Securities Regulatory Commission for approval to launch an ETF tracking listed stocks related to blockchain.

According to CrowdFundInsider, Penghua applied on December 24 for the ETF. It would be China’s first blockchain-based ETF.

The ETF will track Chinese firms dealing in blockchain products and services.

Meanwhile, the Penghua Fund’s ETF application was opportunely timed.

On the day of the application, the Shenzen Stock Exchange floated its Blockchain 50 Index. The Index comprises firms that are active in Distributed Ledger Technology (DLT) and crypto industries.

China and blockchain

Though blockchain technology has immense potential, Chinese investors are still relatively ignorant of its potential.

However, the technology was catapulted into national focus when in October Chinese President  Xi Jinping called for his country to “seize the opportunity” afforded by blockchain.  “We must take the blockchain as an important breakthrough for independent innovation of core technologies,” he said. Xi was speaking at a Politburo Committee session on blockchain technology trends.

Furthermore, the Chinese leader pointed to the vast array of applications possible with blockchain technology. These included financing businesses, to mass transit and poverty alleviation.

Meanwhile, on January 2, news broke that the Bank of China used issued 20 billion yuan ($2.8 billion) in blockchain-based special financial bonds for small and micro-enterprises. The Chinese government is emphasizing support to Chinese small and micro-sized companies to ensure their continued role in the development of the economy.

Blockchain ETF at home

The Reality Shares Nasdaq NexGen Economy ETF (BLCN), which tracks the Reality Shares NASDAQ Blockchain Economy Index, currently trades at $26.15.

It has delivered one-year annualized returns of 14.27%.

Related Story:   With Tencent Backing It, a Virtual Blockchain Bank May Launch Sooner Than You Think  

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