The blockchain industry has been increasing in the past ten years since its inception. In October last year, Chinese President Xi Jinping endorsed the new technology encouraging innovators to incorporate it into various sectors of the economy. The latest reports reveal that Chinese blockchain spending in sectors of financing and investment deals plummeted more than 40% in 2019.
Throughout 2019, the country registered 245 investment and financing deals, which is almost 60% less than in 2018.
2018 Was A Big Year For Chinese Blockchain Investment
A joint study conducted by China’s government-run financial information and media firm Xinhua together with financial data platform Rhino Data revealed this information. Notably, the total amount spent in blockchain investment deals accounted for around 24.4 billion Chinese Yuan ($3.6 billion). The study that was released on January 15 by Xinhua Finance states that that amount plunged 40.8% last year compared to 2018.
Nonetheless, both the number and value of deals have considerably surged since 2017. In that context, 2018 remains the highest regarding blockchain investment spending in China for now. During that year, more than 600 deals took place while 2017 saw just 168 deals according to official data.
As part of that study by Xinhua, it was discovered that early-stage investments, including Series A funding rounds, made up 43.3% in 2019. Interestingly, the proportion of strategic investment and mergers and acquisitions in H2 of 2019 increased considerably. Also, up to 292 institutions have participated in these investments. So far, Shenzhen, Beijing, and Hangzhou have attracted the most significant blockchain projects.
China Endorsed Blockchain Late 2019
In the past several months, China has been strengthening its blockchain expertise. The country has done that quite exhaustively after President Jinping requested the country to accelerate blockchain adoption in last October. The fact that there was a significant drop in blockchain spending in the country was somewhat unexpected.
Xinhua cited a study in late 2019 by American market intelligence firm IDC. That study predicted that the country’s spending on blockchain technology would surpass $2 billion by 2023.
The Chinese government has made a lot of progress in the development of digital Yuan alongside actively funding various blockchain activities and initiatives. According to previous reports, the People’s Bank of China had researched the CBDC for over five years. It accelerated developments after Facebook announced its Libra project. The bank completed its first real-world pilot of the digital Yuan in December 2019.