American investment management firms Goldman Sachs Group and BlackRock are in talks to take majority stakes in new Chinese asset management joint ventures, according to sources who spoke to Caixin. The ventures are reportedly collaborations with major Chinese banks that are pouring billions into new blockchain projects.
According to the report, Goldman Sachs is seeking a 51% stake in a wealth management joint venture with Industrial and Commercial Bank of China (ICBC), the largest bank in the world with $4 trillion in assets under management.
BlackRock and Singapore’s Temasek Holdings Pte. are discussing the possibility of another wealth management joint venture with state-owned China Construction Bank, a “big four” lender. BlackRock and Singapore’s Temasek are reportedly seeking a 60% stake in the venture.
Goldman Sachs and BlackRock are not the first American firms to show interest in Chinese funds.
JPMorgan Chase is currently seeking a majority stake in its Guangdong-based futures joint venture after becoming the first Wall Street firm to receive approval from Chinese regulators in December of 2019.
The developments come as Chinese banks are forging ahead with blockchain initiatives.
All four major state-owned Chinese commercial banks, including ICBC and CCB, are involved in blockchain-based financial services initiatives. According to CCB’s 2018 annual report, the bank reached nearly $30 billion in transaction volume on its blockchain trade finance network that includes roughly 40 domestic and financial institutions.
Last year, the banking giant launched “BCTrade2.0 Blockchain Trade Finance Platform”, featuring new functionality to digitize commodities trade and financial services among 50 branches and 40 external organizations, linking state-owned and foreign banks, commercial banks, and non-bank platforms.
The evolving blockchain-based ecosystems in China are in line with President Xi’s mandate to “embrace” the technology across all sectors of society, fulfilling the country’s goal of becoming a global leader in the adoption of new infrastructure that can power financial transactions and the transmission of data.
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