Alibaba chairman Jack Ma embraces bitcoin for his own company – but cautions users on the dangers of a bitcoin bubble. The Chinese billionaire just launched a blockchain-based money transfer service that will make it easy to send money between Hong Kong and the Philippines.
The service is part of Jack Ma’s company, Ant Financial, which launched the blockchain-based platform on Monday.
Despite his embrace of blockchain technology, Ma has previously described bitcoin as a bubble. He repeated that caution as Ant Financial launched their blockchain-based remittance service on Monday. At a launch event, Ma continued to extol the virtues of decentralized ledger technology like bitcoin.
“Blockchain technology could change our world more than people imagine,” Ma told reporters in Hong Kong, as reported by Bloomberg. “Bitcoin however could be a bubble.”
Ma, along with the rest of the crypto community, has seen the price of bitcoin plummet in recent weeks. This past week, bitcoin hit a new low for 2018 as it sunk below $6,000 on Sunday. Although the price bounced back Monday to a high of around $6,200, bitcoin is still significantly lower than the all time high it reached in December 2017.
Ant Financial launched their blockchain-based remittance service in partnership with Standard Chartered Plc and GCash.
The remittance service is expected to be particularly popular with Hong Kong’s large population of Filipino workers and domestic helpers. These thousands of workers regularly send money home but are forced to pay costly fees for remittance services.
Ma’s Ant Financial raised $14 billion in its latest funding round. The financial company is a subsidiary of Alibaba and has received investments from some of the biggest names in global finance.
It’s no secret that Ant Financial was exploring the use of blockchain technology. Ant Financial has reportedly been researching blockchain for the past few years. However, this is the first time Alibaba or its entities have used blockchain in mainstream finance.
Ma took the opportunity at the launch event to criticize the traditional banking industry. Ma chided the industry for charging excessive fees on overseas payments, for example.
Ant Financial has a motivation to criticize the banking industry. The company was recently blocked from buying Moneygram International Inc., the popular remittance service. Now, Ant Financial wants to build a superior service.
“Traditional financial institutions serve 20 percent of people and make 80 percent of profits. New financial institutions should service 80 percent of people, and make 20 percent of profit,” said Ma at the Ant Financial launch event, according to Ma.
Today, Ant Financial is focusing on blockchain-based remittance payments between Hong Kong and the Philippines. However, the ultimate goal is to expand beyond.
Ultimately, it’s a big deal any time an internet giant implements blockchain technology. Alibaba and its subsidiary Ant Financial will now use blockchain to better compete with remittance services like Moneygram – something that could have huge effects on the global financial system.