Chinese state-owned company launches crypto funds in Hong Kong

China Pacific Insurance (CPI), a state-owned company, has launched two cryptocurrency funds in partnership with investment firm Waterdrip Capital.

Fast facts

The Pacific Waterdrip Digital Asset Fund I will focus on investments in early-stage blockchain projects, while the Pacific Waterdrip Digital Asset Fund II will manage proof-of-stake digital assets.
These funds will target institutional and wealthy private investors, according to Waterdrip Capital’s blog post published Thursday, which confirmed the report of local media outlet KR36.
Owned by the Chinese government, CPI is the second-largest property insurance company in the country. Its subsidiary, CPIC Investment Management in Hong Kong, will reportedly manage the funds.
Waterdrip Capital is a global investment institution founded in Shanghai in 2017 that has previously invested in the Chinese crypto mining industry and supported blockchain-related projects.
The firm said in its blog post that the launch of the two crypto funds relates to the implementation of virtual assets-linked incentive policies by the Hong Kong government.
The launch of these funds coincides with Hong Kong’s commitment to becoming a regional hub for the Web3 industry. A number of Chinese state-owned banks’ branches in Hong Kong have reportedly started offering services to local cryptocurrency companies.
Crypto transactions and mining have been banned in China since 2021, and exchanges were kicked out of the mainland in 2017.