China has established itself as a blockchain technology hub and currently leads in the use of the innovation. The nation has filed the highest number of blockchain patents globally. The East Asian country has a new world title.
According to data by InWara, out of 583 token offerings launched in 2019’s first half, those Chinese in origin raised the most capital. Chinese projects have so far raised an astounding $1.18 billion, which is 33.2 percent of the money raised from token sales in 2019. This quite surprising since China’s government is primarily viewed as crypto bearish.
Chinese IEO raises $1 billion
This year, blockchain startups have raised $2.26 billion in venture funding. In the first quarter, these projects raised $560 million. In the second quarter, however, they raised at least three times the first quarter’s amounts resting at $1.7 billion. Digging deeper into the data reveals that the US had the lion’s share of the token offerings at 66.
It was followed by Singapore another upcoming crypto friendly environment with 52 token sales. China had 30 despite raising the most considerable amount of cash. Of the token sales, 69 percent were ICOSs while 21 percent were IEOs. STOs had 10 percent. Token-based funding has nonetheless taken a massive hit from the ICO market collapse. The capital raised is 46 percent less since ICO numbers have declined by 74 percent compared to 2018 figures.
In contrast, the IEO rates are growing, registering a 6,000 percent rise with 123 projects. These projects have raised a massive $1.63 billion, and this figure is expected to rise with time as the ICO further declines. China’s dominance in token funding was primarily occasioned by the Bitfinex’s LEO, May 2019 IEO. Floated on Tokinex, the IEO raised $1 billion. Gate came second with $320 million. The US-based 66 token projects raised $255 million, a 7.6 percent of all capital raised globally. Singapore, in its part, raised $232 million.
Support for Blockchain Developers
The Chinese government is greatly attracted to the efficiency and cost savings nature of blockchain. As an illustration, The People’s Bank of China, which is the Chinese central bank, is working on a blockchain based finance and trade platform. In fact, China has blockchain sandboxes to help boost the development of the technology. The Hainan sandbox, for instance, has government-sponsored incubators directed towards startups and entrepreneurs complete with exclusive deals, aid, and other perks.
This US has a National Action Plan for Blockchain, calling for “a comprehensive, coordinated, pro-growth approach to developing blockchain technology in the United States.” The plan forwarded by the Chamber of Digital Commerce has nevertheless not established any government strategy for blockchain yet.
In comparison, China is miles ahead. DLA Piper law firm’s attorney Lin Pang says that China:
“Encourages innovation and creativity by providing the resources, including the incubator. For foreign companies [coming in] they want to make sure you work with the local companies and contribute to their economy.”
Chinese blockchain developers also have a much easier time disrupting older systems than their peers in the US. The incumbents in financial services in the US, for instance, are entrenched and mature and have regulations protecting them. Nonetheless, in China, the opportunities for disruption are rife, and the government supports their effort.