Disclaimer: This article was updated to reflect that Hong Kong-based CPIC Investment Management operates independently from its parent firm China Pacific Insurance, which is headquartered in mainland China.

A Hong Kong-based subsidiary of China Pacific Insurance (CPI), a major insurance company in China, has introduced new cryptocurrency products.

CPI's investment arm CPIC Investment Management is launching two crypto funds in partnership with the investment firm Waterdrip Capital, the local tech-focused news agency 36Kr reported on April 3.

Owned by the central government of mainland China, the Shanghai municipal government and China Securities Finance, CPI is the second largest property insurance company in mainland China after the People’s Insurance Company of China.

Despite being connected to the Chinese state, CPIC's newly launched crypto funds do not carry any government backing, a spokesperson for CPIC told Cointelegraph. The company operates independently from its Chinese shareholders, the representative added.

The new crypto funds reportedly include a venture capital fund called the Pacific Waterdrip Digital Asset Fund I, which will focus on investments in early-stage blockchain projects. The second fund, the Pacific Waterdrip Digital Asset Fund II, will reportedly manage proof-of-stake digital assets.

According to the report, the new crypto funds will target institutional and wealthy private investors.

Waterdrip is a global investment institution supporting blockchain-related projects and crypto startups. Founded in 2017, Waterdrip is known for supporting the Chinese crypto mining industry and investing in projects like Polkadot-based decentralized Web3 network Peaq.

Related: Hong Kong’s crypto rules set a high bar for ‘good reason,’ says SFC adviser

The firm took to Twitter to confirm the news on Monday, stating that the launch of the two joint crypto funds relates to the implementation of incentive policies related to virtual assets by the Hong Kong government.

The news comes amid the government of Hong Kong growing increasingly committed to developing local cryptocurrency infrastructure, distinguishing its crypto regulation approach from China’s crypto ban enforced in 2021. In late March, online reports suggested that some crypto firms in Hong Kong have been increasingly attracting interest from Chinese state-owned banks.

Magazine: Asia Express: US and China try to crush Binance, SBF’s $40M bribe claim