Ant Financial's Alipay App to Regulate Crypto Trading
The Alibaba company is one of the most significant global companies on the market. Their involvement in a variety of industries means that the corporation constantly has to take the first step in communicating, cooperating, and interacting with regulators within the countries that the company operates in. This is typically, China, the communist nation being by-far the largest setting for the business done by Alibaba, which happens in countries all over the world.
This past week, the company has reported that its payment affiliate, Ant Financial, will be working closely with Chinese regulatory authorities in order to respond to problems associated with the peer-to-peer trade of cryptocurrencies. Ant Financial reported in an interview with Beijing News that they would be “beefing up” its efforts to regulate and monitor the accounts of both merchants and customers operating on the Alipay app, which helps to facilitate trade in a variety of different industries. Additionally, a new set of regulatory sweeps by the company will attempt to respond to sites popping up that integrate Alipay as a step in a process of OTC cryptocurrency trade.
It is clear that Ant Financial is trying its best to stay on the good side of regulators in China, where scrutiny on cryptocurrency in the tightly-regulated market is at an all-time high. The move quickly followed the decision by similar app WeChat Pay, which had recently begun the process of blocking and monitoring the accounts that might have been trading cryptocurrencies on the app.
A Cooperation Precedent
Another major component of the Ant Financial decision comes from the recent legal history regarding cryptocurrencies in china. In a ruling by the People’s Bank of China late last year, the institution decided to ban all cryptocurrency trading, as well as all Initial Coin Offerings (ICOs). Though the decision created trouble for some exchanges, most simply moved their business to an overseas country with better rules regarding crypto trading.
But for apps like Alipay, which has always survived on the merchant and free-market system, the struggle is in preventing the underground trade of cryptocurrencies on their own application. This latest decision by Ant Financial screams of a clear intent to restore regulatory compliance that previously had not been there within the application. It will not be an easy task to regulate, though. Alipay consistently sees trading accounts issuing transactions involving cryptocurrency, and many of the accounts disguise their real intent in codewords and double-speak.
A Defunct Alternative
Following the ban in 2017 on coin offerings and cryptocurrencies, these applications have become the main source for many Chinese traders to trade cryptocurrency easily. Following the efforts of the associated applications to prevent these transactions, it is unclear where tens of thousands of traders might go. Although some apps open themselves to use by Chinese residents, the ban from the People’s Bank of China makes it increasingly hard for Chinese citizens to hold crypto.
As an essential component of the crypto community, the world will continue to watch the Chinese regulatory battle as it is waged.