Gold­man Sachs and Black­Rock Reportedly Seeking Majority Stakes in China’s Biggest Banks Backing Blockchain Technology

22 January 2020, Wednesday, 00:35 -
Gold­man Sachs and Black­Rock Reportedly Seeking Majority Stakes in China’s Biggest Banks Backing Blockchain Technology

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.

Featured Image: Shutterstock/View Apart

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