Major Chinese insurer launches two crypto funds in Hong Kong

The fourth-largest insurer in China by revenue, China Pacific Insurance Group, via a subsidiary, has launched two investment funds in Hong Kong focused on the digital asset industry.

With the implementation of incentive policies related to virtual assets by the Hong Kong government, CPIC Investment Management (HK) Company Limited and Waterdrip Capital jointly launched a digital asset fund.https://t.co/OeyulJNbo6

— Waterdrip Capital (@waterdripfund) April 3, 2023

The partnership in Hong Kong is led by Waterdrip Capital, a Shanghai-based venture firm founded in 2017 by blockchain-industry pioneers that has backed more than 100 sector projects.

The funds are open to institutional investors such as corporations, family offices and high-net-worth individuals.

Pacific Waterdrip Digital Asset Fund I aims to participate predominantly in seed and other early rounds for blockchain startups, focusing on infrastructure solutions, DeFi applications, Web3-instruments such as SaaS, metaverses, NFT products, and more.

Pacific Waterdrip Digital Asset Fund II will earn returns from investments in digital assets on a Proof-of-Stake algorithm. To boost profits, the structure will employ derivatives and risk-control tools.

The subsidiary of China Pacific Insurance in Hong Kong holds licenses to operate as a securities adviser and asset manager.

Earlier this year, Hong Kong Financial Secretary Paul Chan signalled the territory’s readiness to become a global hub for crypto companies worldwide. In the autonomous region budget they earmarked about $6.4 million to support the relevant infrastructure.

Earlier, Hong Kong eased the regulatory regime for the industry, and the government-backed accelerator announced plans to support up to 1000 Web3 startups.

Former BitMEX CEO Arthur Hayes suggested that these trends are linked to Beijing’s efforts to return to the digital-asset market.

Bloomberg reports that Hong Kong’s crypto initiatives are tacitly supported by Beijing officials, Interest in servicing crypto companies in the jurisdiction has been shown by major Chinese banks.

Kaiko chief executive Ambre Soubiran noted that Hong Kong could ‘lure’ crypto companies away from the United States due to tighter regulatory oversight.