Public blockchain startup Conflux will set up a new data management system for the provincial government of Hunan and set up an innovation and training lab at the province.

Why it matters: This is the second official endorsement that Conflux has received from a government entity—an extremely rare feat for a public blockchain startup—after it struck a deal with the local Shanghai government in December.

  • Public blockchain applications are usually frowned upon in China. Their decentralized nature does not allow for information to be controlled.
  • Conflux has avoided the ire of regulators, and even invited their support, by steering clear of taboo activities like initial coin offerings (ICOs).

“It is a great opportunity to demonstrate to the wider society that blockchain is actually useful and not just speculation.”

—Conflux founder Fan Long to TechNode

Details: Conflux will “revamp” the provincial government’s information architecture using its blockchain solutions and create a blockchain research and training facility at Hunan University, the startup’s founder Fan Long told TechNode.

  • The Beijing-based company has set up an entity in Hunan, which it co-owns with local partners, that will create a new blockchain-based low-level architecture for storing government data.
  • The system will digitize government data and integrate it with the Conflux architecture, which will enable easier and secure data sharing between administrative agencies, according to Long.
  • The project is worth around $10 million, he added.
  • Conflux has set up a government-funded lab at the province’s top university and hired team of 15 “key people,” Long said.
  • “If the Covid-19 situation is getting better, it will be fully operational by the end of the year,” he said.

Context: After Xi Jinping encouraged the adoption of blockchain last autumn, local governments have jumped on the bandwagon.

  • The Beijing municipal government announced in July an ambitious plan to integrate the technology in its governance, with applications in customs, cargo, finance, real estate, and more.
  • Conflux’s December deal with the Shanghai government was for a 10,000 square meter research lab in the city.
  • The startup reportedly received $35 million in funding in a private token sale in 2018, from investors including Sequoia China and Huobi Capital.
  • It has not and will not try to raise money through an ICO, the company has said. ICOs are a popular way of fundraising in the blockchain world, but were banned in China in 2017.
  • “If you want to go beyond speculation, you have to be compliant,” Long said.

READ MORE: Beijing unveils plan for blockchain-based government

Correction: An earlier version of this article incorrectly stated that Fan Long was the CEO of Conflux.

Eliza Gkritsi

Eliza is TechNode's community listening reporter at the Shanghai office. She acts as a link between the editorial team and TechNode Squared members. She previously worked as a reporter for WikiTribune...