Bitcoin

HK fintech company Credit China Fintech invests $30 million in blockchain provider BitFury Group

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Blockchain infrastructure provider BitFury Group announced on Thursday a deal with Hong Kong-listed fintech company Credit China Fintech Holdings to set up a joint venture that will focus on promoting the technology in China.

As part of the deal, Credit China Fintech will invest $30 million in BitFury shares and the setting up of the joint venture. The joint venture will be used to sell BitFury's bitcoin mining equipment.

BitFury Group provides hardware and software around blockchain technology and this will be its first major venture in China.

Blockchain refers to the technology underlying the crypto-currency bitcoin and works like a huge, decentralized ledger that records every transaction made on the chain. The information is stored on a global network to prevent tampering. Applications for the blockchain include using it to secure information, facilitate bank loans and enable trading in a cheap and efficient way.

Phang Yew Kiat, vice chairman and CEO of Credit China Fintech, told CNBC by email the company was exploring the use of blockchain on some of its fintech platforms, which include peer-to-peer lending and payments services.

"We have a working prototype payment system using blockchain technologies working in our research laboratory," Phang said.

Blockchain has evolved from being a new technology with an abundance of potential to companies, governments and financial institutions looking into a variety of applications for it.

But it is in its nascent stage, with industry players still experimenting with proof-of-concepts on blockchain's various uses and wide-scale implementation still some way off, Ng Zhi Ying, an analyst with Forrester, told CNBC by phone.

For example, last year the Monetary Authority of Singapore said it was teaming up with blockchain technology company R3 and a consortium of banks and the Singapore Exchange on a proof-of-concept project that would allow inter-bank payments using blockchain.

At the World Economic Forum in Davos earlier this month, the CEO of Alibaba's payment affiliate Ant Financial said his firm was also looking into using blockchain for its massively popular Alipay system.

"It still hasn't gained that maturity level and people are trying to find out how do you use (blockchain), how can we scale it and how do you justify the return-on-investment of investing in this technology," Ng said.

Among the areas of application that industry players are looking into include customer identity authentication for banks, preventing fraud and risks around smart contracts in the insurance industry, tracking the movements of goods in the shipping industry and cross-broader payments using bitcoin.

The technology's growing popularity also saw the setting up of the Global Blockchain Business Council by BitFury Group and international law firm Covington, with the aim of bringing industry players together and highlighting the latest blockchain innovations.

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