Ant Financial, the financial affiliate of the Alibaba group, announced on June 8 that it had raised $14 billion from various international investors. The company notes in its press release that:
“The Company will continue to invest in developing its blockchain, AI, security, IoT and computing capabilities to upgrade its global technology platform for the next generation.”
The company’s explicit mention of blockchain development should not come as a surprise, as it is consistent with previous announcements. In September last year, the South China Morning Post reported the company’s chief strategy officer, Chen Long, stating that:
“Blockchain addresses to the trust issue faced by all financial transactions. Its era is set to come… Blockchain can help bridge trust, bring down transaction costs and therefore improve efficiencies of our financial system tremendously”
Ant Financial: A Shift towards Tech and Away from Finance
Ant Financial’s focus on blockchain, AI, and IoT seem to be in line with the company’s vision of its future. Sources have reported to CNBC that the company is making technology services its main focus. Its original focus was consumer finance, and payments and the sources suggest that increasing pressure from Chinese regulators as they crackdown on financial risk was the impetus for this shift. Further, there are reports that the company is losing ground in the mobile payment war to Tencent’s WePay on its WeChat platform.
The company has already announced several planned blockchain applications. The South China Morning Post has reported that the company is building a smart contracts platform for the industrial, finance, and leasing markets. One of the company’s initial projects was developing a leasing regulation and service platform which also required users to register using a biometric facial scan.
A Growing Divergence between Cryptocurrencies and Blockchain
Chen Long has stated that the company remains optimistic about blockchain technology, despite the crackdown by the People’s Bank of China on ICOs and cryptocurrencies. His position on the potential of blockchain technology amidst the crackdown is consistent with the position espoused by many banking executives and regulators around the world. Jamie Dimon, CEO of JP Morgan has previously called Bitcoin a ‘fraud,’ but his bank has filed a patent for the use of blockchain technology in financial settlements.
Another example is the Monetary Authority of Singapore, which has taken a stricter stance on ICOs and exchanges lately; warning 8 exchanges and halting an ICO. At the same time, the financial regulator has been collaborating with the financial industry on the use of blockchain technology in clearing and settlement of payments and securities.
As the pace of new token issuances and the applications of blockchain technology continue to increase, we may see a greater divergence between cryptocurrencies and the underlying blockchain technology. ‘The establishment’ may well continue to invest in blockchain while simultaneously cracking down on cryptocurrencies. One has to wonder what Satoshi Nakamoto would have thought about this.