Jack Ma’s Ant Financial looks to take world to China with blockchain
At a time when a new report deemed blockchain as likely to reinforce a structure for cash securities in large and complex but mostly domestic markets such as Japan and China, the parent company of China’s largest online payment service, Jack Ma’s Ant Financial, has expressed interest in exploring more uses of blockchain technology to achieve its expansion goal.
Ant Financial is planning to raise about $3 billion to support its efforts at venturing into big markets like the U.S. and India. Blockchain is surely going to play a vital role in making it happen.
Founded by the Alibaba group, Ant Financial originates from Alipay, China’s leading third-party online payment solution which has over 450 million users. Though Alibaba is yet to enter the Indian market directly, it is leading a $200 million round of investment in Indian online retailer Paytm E-commerce Pvt which is one of India’s latest unicorn – a start-up company valued at more than a billion dollars. Its Ant Financial has also put in to buy U.S. money transfer company, MoneyGram, for about $880 million.
Its CEO, Eric Jing, stated on CNBC recently that their plan is to gain up to two billion customers in the next ten years and they are looking into blockchain technology as well as artificial technology “…to bring more, a high level of security” as they will be deeply integrated into Ant Financial’s operations.
Ant Financial had earlier used blockchain last year to make charities more transparent by monitoring their activities to address the inconsistencies that have marred the operations of organizations in the industry for years.
The stage now seems set for Alibaba which has a goal of deriving 20% to 30% of its sales from outside of China.
In the new report, Blockchain in Financial Markets: How to Gain an Edge by Bain & Company, the study says blockchain – or distributed ledger technology – is likely to arrive first in those markets that are ready jurisdictions for it which include Asia-Pacific and Latin America that have a centralized and integrated infrastructure run by a single exchange and a proactive regulator who can work together to drive innovation.
It adds that markets are likely to develop into four distinct archetypes with each having distinct implications for how and when individual firms should adopt the technology.
“First, in large, complex, but mostly domestic markets such as Japan and China, DLT is more likely to reinforce a relatively integrated structure for cash securities. By contrast, DLT may have the opposite effect in the second archetype, large financial hubs, such as the US and major European markets,” the report says.
The third archetype is smaller, domestically focused markets like Australia, Canada and Brazil where their markets are centralized for participants and regulators to work closely while the fourth archetype—small markets with international connections, including Singapore and Hong Kong—is likely to remain integrated for cash securities but more subject to global market practices and links in derivatives and over the counter OTC.
China has been making preparatory moves to usher in blockchain technology into facets of its economy. The Alibaba group’s interest in the technology will be a great boost for budding startups in the country even as the company – which Jing says has seen growth by using digital technology to serve the people for their payment service – takes advantage of the potentials in the market to keep innovating to meet their identified huge demands.