The Chinese Internet Giant and father of Wechat, Tencent, had made its current opinion of Libra clear. They stated that Facebook’s budding cryptocurrency represents a severe risk to already established systems for digital payment.
Last week, Tencent released a blockchain whitepaper written in Chinese. Within it, Tencent described Libra as something that looked radical and bold but described it as a rational, prudent move from Facebook.
The whitepaper went on. It stated that Facebook’s Libra coin had the potential to win market shares at a fast pace, especially within countries that don’t hold a credible local currency. It’ll grow in places that lack financial infrastructure as well, the whitepaper said. However, it warned that Libra would be in direct opposition against Chinese companies who could not replicate a blockchain.
The whitepaper explicitly reads that any internet company with a relatively matured system that facilitates digital payment will be threatened by Libra. The whitepaper cites AliPay and WeChat Pay as examples of these companies. What’s important to note is it's expression of “should it ever launch,” implying that Tencent doesn’t believe for certain that the cryptocurrency will launch. AN understandable sentiment, considering Libra’s trying times.
The Chinese Central Bank has made it no secret that they’re working on their digital currency for more than a few years now. While they’re doing this, however, they’ve taken the liberty to ban any form of fiat-to-crypto trades in the country since 2017.
As is the way China operates, Alibaba and Tencent, who owns Alipay and WeChat pay respectively, have no known trading or cryptocurrency project under their name to exemplify this. Behind closed doors, both the Chinese government and the internet giants themselves can have different things to say about the matter.
WeChat gave an official post on Weibo, which Dovey Wan, a founding member of South Korea’s PrimitiveCrypto, shared on twitter,
wechat pay also followed up with an announcement to reassure “wechat will never support cryptocurrencies trading, and has never integrated with any crypto merchant
And it says “we welcome any whistle blower to report such behavior” 🤯🤯🤯 pic.twitter.com/Kj4HTupkKZ
— Dovey Wan 🗝 🦖 (@DoveyWan) October 10, 2019
Alipay stated more or less the same, with a more pointed warning against trading in tweet,
There're several reports about @Alipay being used for bitcoin transactions. To reiterate, Alipay closely monitors over-the-counter transactions to identify irregular behavior and ensure compliance with relevant regulations. [cont'd…]
— Alipay (@Alipay) October 10, 2019
It was probably aimed at Binance, who had enabled over-the-counter trading on their exchange. This, in turn, would allow Chinese users to trade in crypto assets, using a counterparty and settling payments with Alipay’s P2P transaction service. Alipay, in turn, warned that it would stop any relevant payment service if they detect crypto trading activity.
Crypto is not Blockchain
As both these company groups have made it very clear that they aren’t doing anything related to cryptocurrency, they’re practically pouring money into efforts related to blockchain.
Tencent, the parent company of WeChat, is already well known for the suite of blockchain-based services it provides since they released their very first whitepaper back in 2017.
The Alibaba Group, the parent of Alipay, actually holds the top position with a grand total of 90 patent applications, all focused on blockchain-related technology. That’s even more than IBM, Bank of America, and Mastercard.
Tencent’s whitepaper stated that Libra’s launch, should it happen, would irreversibly affect the global expansion of digital payment companies. This is especially true if they didn’t sign up for the Libra consortium.