Blockchain Startup Conflux to Get Shanghai Government Funding for Research Institute

Senior Shanghai government officials have agreed to help blockchain startup Conflux open a research institute and incubation center with millions of dollars, the firm's co-founder said.

The Shanghai government has agreed to open a research institute with blockchain startup Conflux as early as the end of this December, while considering an incubation center that could be set up in June 2020, Fan Long, co-founder of Conflux, told CoinDesk.

The move comes as the government continues to crack down on cryptocurrency firms that had mushroomed after Chinese President Xi Jinping's speech praising blockchain.

The Conflux Incubation Center aims to invite developers and entrepreneurs to build decentralized applications on the public permissionless blockchain developed by the firm.

"Conflux started as a research project. We initially were just trying to find a way to scale up blockchain that could make it faster and more secure," Long said.

"The Chinese government realizes public blockchain is important," Long said.

In October, the Chinese government revealed more than 500 enterprise blockchain projects launched by state-owned banks, tech companies and government agencies, whereas few decentralized public chains have received the government's blessing.

Yifeng Zhang, the head of Hangzhou Blockchain Technology Research Institute, said public permissioned blockchain is the best chance for the industry to commercialize the technology, during the 2019 Digital Economy Innovation Summit in October.

President Xi's praise in October for blockchain prompted many companies to explore blockchain technologies in a bid to raise money through an ICO. As many as 25,000 blockchain companies out of 28,000 across the blockchain industry might have tried raise funding via centralized token sales, according to an official from the Beijing Blockchain Application Association.

Beyond Shanghai's push to develop blockchain technologies, China has been pushing for a blockchain network that has a scale large enough to provide basic public services across the country.