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Ant Financial remains ‘optimistic’ on blockchain technology despite PBOC’s cryptocurrencies crackdown

Ant chief strategy officer Chen Long’s remarks come within a month of the Central Bank slapping an outright ban on blockchain-backed initial coin offerings

PUBLISHED : Friday, 22 September, 2017, 9:56pm
UPDATED : Friday, 22 September, 2017, 10:47pm

The chief strategy officer of Ant Financial, an affiliate of Chinese e-commerce juggernaut Alibaba Group, says he remains optimistic on blockchain technology, despite the central bank’s ban on one of its best-known applications – cryptocurrencies.

“Blockchain addresses to the trust issue faced by all financial transactions. Its era is set to come,” Chen Long, told the South China Morning Post on the sidelines of a conference in Beijing on Friday.

The digital ledger technology, best-known behind cryptocurrencies like bitcoin, provides a series of networks of databases that allow participants to create, disseminate and store information in an efficient and secure manner, eliminating the need for a central authority while bringing greater transparency.

Chen’s remarks come within a month of the People’s Bank of China slapping an outright ban on blockchain-backed initial coin offerings (ICOs), where companies raise virtual tokens in exchange for funds or other cryptocurrencies, and expanded the crackdown to all domestic trading platforms of digital assets including bitcoin.

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The financial veteran dismissed cryptocurrencies as the primary value of blockchain technology.

“Blockchain can help bridge trust, bring down transaction costs and therefore improve efficiencies of our financial system tremendously,” said Chen, adding the technology will receive the baton from mobile internet to lead the next revolution.

In April, Ant Financial vowed to escalate its use of blockchain technology, starting with applying it to its charity platform Ant Love.

The technology is expected to allow charity outfits, auditors, donors and other relevant parties to better track information on donation history and project disclosures.

Chen agreed that blockchain-backed ICOs were running “wild west” when the central bank moved to rein them in.

“It was like what China experienced in peer-to-peer lending, only more intense, as the ICOs grew so rapidly within months and technically speaking, the companies can refuse to repay investors who subscribed tokens more like shares,” he said.

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Nevertheless, it’s still possible for ICOs to work their way back once the regulators figure out how to regulate the market, Chen added.

“How to balance between risk and growth is a question for all companies. The core is to know your clients,” said Chen.

Alibaba Group owns the South China Morning Post.