Partnership allows Chinese investors access to overseas opportunities in a wide range of assets
Both firms signed an MoU to distribute $200 million of a quota allocation for sophisticated investors
Blockchain-based private market exchange ADDX has teamed up with China Construction Bank to enable domestic investors in China to engage in offshore investments.
The two firms will work together on a $200 million allocation under the Qualified Domestic Limited Partnership (QDLP) scheme, which allows experienced investors to participate in funds focused on overseas investment. This scheme enables investments in both public and private markets.
“By allowing domestic capital to buy into high-quality offshore assets, China is ensuring its investors can build globally diversified portfolios that are best positioned to preserve and expand gains from the opening-up of the country’s economy over the past few decades,” ADDX CEO Oi-Yee Choo said in a statement.
ADDX will offer these investors in China access to private market opportunities issued as digital securities in a wide range of assets from equities to hedge funds and venture capital funds, the statement said. Investors there have been trying to find ways around restrictions that effectively outlawed digital asset ownership.
The deal comes a year after ADDX reached an agreement with Singapore-based fund management company ICHAM, which received a $200 million QDLP allocation through the Chongqing government’s $5 billion quota. Under the agreement, ADDX became a key platform for investments made by Chinese institutions and individuals through the ICHAM fund in China.
Founded in 2017 with operations kicking in 2020, ADDX uses blockchain and smart contract technology to fractionalize private market investments, allowing it to lower minimum investments from $1 million to $10,000. The private market exchange raised $58 million in a pre-Series B funding round in May.
ADDX is licensed under the Monetary Authority of Singapore for the issuance, custody and trading of digital securities. Earlier this month, it became the first financial institution to recognize cryptocurrency in its assessment of assets of accredited investors.
The memorandum of understanding with China Construction makes way for the bank to be appointed as the custodian for the $200 million investment that ADDX effectively secured. It could also distribute the fund units to its wealth clients under the QDLP scheme. China Construction Bank is one of the country’s “Big Four” banks with a market capitalization of $175 billion, making it among the top most valuable banks in the world.
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