Blockchain startup Conflux has received an over-$5 million research grant from the Shanghai Science and Technology Committee and Xuhui District government, which is part of the city’s municipal government.
The Beijing-based firm touted that it has become the only public, permissionless blockchain project backed by the Chinese government, according to the firm’s statement shared with CoinDesk. The project has made it in the list of 57 high tech projects, including 5G and aerospace technologies, by the Shanghai government, according to an Nov. 25 official document from its tech committee.
The funding will be used to develop the public chain’s research. The project will also support an aerospace supply chain proposed to be built on Conflux Network, the firm said.
Conflux’s project has been included in the latest Five-Year Plan by the Shanghai government according to the firm. The plan is a series of social and economic initiatives that define the country’s future economy and societal development..
China has been mostly focused on developing permissioned blockchain while being cautious about public decentralized chains, since such projects have launched initial coin offerings (ICO) to raise capital and distribute their tokens as an alternative to fiat currencies.
“While the amount of money granted is important, it is the government’s signal to support a public permissionless chain like Conflux that matters the most for us,” Conflux co-founder Fan Long told CoinDesk.
The People’s Bank of China, the country’s central bank, has banned ICOs and clamped down on fiat-to-crypto trading since 2017. Conflux will not launch an ICO or be involved in any form of centralized token sales, according to Long.
Founded in 2018, Conflux has raised $35 million via a private token sale from prominent investors in China, including private equity firm Sequoia China, Huobi Group, Shunwei Capital and Rong360. Its team includes developers who went to top engineering schools in China and studied abroad for their graduate degrees.
The Shanghai government agreed to help Conflux open a research institute and incubation center with an undisclosed amount of research funding, CoinDesk reported in December 2019.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.