How the ‘AntChain’ blockchain is taking China by storm – Decrypt

For a few years, ringing that bell on Nasdaq was the American Dream of many Chinese entrepreneurs. Yet lately, with China and the US apparently disagreeing about everything, many firms have thought-about—or executed—a “homecoming” secondary listing in Hong Kong, along with their major itemizing in New York. The purpose, after all, is to please the aspect that yields decrease threat and issues extra to their enterprise.

For the Ant Group, an affiliate of Alibaba Group Holdings, skipping the US debut and selecting a duo itemizing in Hong Kong and Shanghai is the last word snub. After all, why hassle to ring that New York bell when you need to “come home” to the motherland on the finish of the day?

Valued at $200 billion, Ant Group is the most important unicorn on the earth. Its flagship product Alipay, which has a mere 1.2 billion customers globally, has offered Fintech options to each shoppers and companies, starting from funds and lending to wealth administration and insurance coverage.

But extra importantly, Ant Group can also be probably the most lively participant in China’s blockchain circle. This week’s da bing appears to be like into Ant’s place in shaping China’s blockchain panorama.

The Ant that follows the federal government’s crumbs

Not solely is Ant Group large on blockchain, the entire Alibaba group is bullish, too. Jack Ma, who owns 50% of Ant’s voting energy, famously claimed in 2018 that blockchain (along with the Internet) will “reshape the world’s financial system within the upcoming 20 years.” The juxtaposition between blockchain and the Internet was a powerful signal of Ma’s religion within the know-how, regardless of his skepticism of Bitcoin.

Perhaps Ma’s confidence bought a lift after China made blockchain a nationwide technique in 2019 and has since topped it a national infrastructure. To sing together with the federal government’s technique, Ant Group has positioned its product traces to serve its sugar mommy: authorities.

For instance, Ant signed a deal with the land division of Zhuhai, one of many seven financial zones on the southeast of China. The deal offers Ant a possibility to offer a blockchain-powered answer that connects authorities, banks, and end-users to share information reminiscent of title deeds, credit score historical past, and mortgage functions. The purpose is to digitize the entire dwelling buying course of and cut back guide labor.

This is, in truth, not the primary time Ant approached the land division of a authorities. Back within the days when your correspondent was making blockchain offers with metropolis governments in China, Ant was a frequent competitor and even signed up agreements with prominent cities such as Xiong An.

The blockchain fantastic thing about authorities offers

For the Ant Group, following the federal government’s crumbs isn’t only a matter of burnishing its model—there’s actual RMB in it.

First and foremost, successful governmental offers permit Ant to cross-sell and up-sell. Imagine all of the adjoining cloud providers Ant can bundle and promote together with its blockchain options. Merely gathering information from shoppers who use their blockchain functions would not directly permit Ant to promote extra monetary providers to end-users.

Second, most Chinese cities present tax advantages to their know-how distributors. These native governments that blindly set up “blockchain industrial parks”  are dying to have firms really transfer in and contribute to the native financial system. It’s a dream come true to win a deal and have a tax minimize on the similar time.

And lastly, expertise issues. Access to actual use instances permits Ant to rent and nurture blockchain specialists early on. It can rent engineers who won’t be blockchain specialists instantly, however they may develop into skilled and develop by way of these governmental offers. Nothing actually trains expertise higher than engaged on actual use instances.

“If you want to get on a chain, get on AntChain”

“If you want to get on a chain, get on AnthChain.”—an Ant Group poster advert

But Ant Group’s ambition doesn’t cease at merely promoting to the federal government. It needs extra.

On July 23rd, in a high-profile product launch convention hosted by the Chairman of Ant Group—an enormous deal, he doesn’t go to each product demo—the corporate launched its newest model of “Ant Blockchain Open Alliance.” The consortium goals to deliver small companies and builders to the nascent trade, and assist them construct functions on high of Ant’s blockchain at a decrease value.

Ant Group claims that its product is being utilized in over 50 instances and is powering—and right here they’ve invented their very own metric—100 million “on chain data” day-after-day. (No one is aware of precisely what this bizarre metric represents, although the overall consensus is the quantity refers to transactions.)

Regardless, many small companies, particularly e-commerce companies, are already utilizing Alicloud, which is the underlying cloud infrastructure of Antchain. But the storyline is acquainted. Unlike different blockchain suppliers that simply present blockchain, Ant is providing a complete suite of use-case targeted options that can bind their shoppers to nobody however Ant.

“It’s formidable what Ant Group has done in the blockchain industry,” one crypto safety knowledgeable instructed me. “They seem to be doing all the boring stuff for the hardcore crypto fans,” he said, meaning that its blockchain play is strictly a utility offering, aimed at enterprise business. “I mean, there’s no token economics, no fancy crypto incentive mechanism, no Defi… but guess what? They have made the most noise and struck the most deals so far.”

In the meantime, Ant Group has additionally been gathering patents on the aspect. It has topped the blockchain patents chart for the previous four years. While the adoption questions nonetheless stay, Ant has extra assets than some other gamers to both discover new shoppers or onboard their present SMEs.

Going world?

Despite being born and raised in China, Ant Group has grown far outside of its motherland. Its consumer-facing enterprise isn’t solely serving Chinese vacationers exterior of China by offering fee options to native companies, so Chinese vacationers pays immediately with their Alipay app whereas procuring internationally. It additionally immediately participates in getting native banking licenses, reminiscent of a virtual one in Singapore.

Its blockchain enterprise isn’t lagging behind. In 2018, Ant introduced a partnership with AlipayHK and GCash, launching an immediate cross-border remittance service between Hong Kong and the Philippines. Blockchain is the underlying infrastructure.

Two years in the past, that remittance service may appear to be a easy use case. But China’s DCEP is more likely to empower actual cross-border remittance. Couple that with the Blockchain-based Service Network (BSN), which might simply combine Ant’s enterprise blockchain, and China’s blockchain ecosystem instantly turns into a essential, worldwide powerhouse.

The phrase “ant” is pricey to Ant Group’s journey. The founding group believes that “small is beautiful, small is powerful.” That may be true within the early days. But now the ant is turning into extra just like the elephant, and each transfer it makes causes reverberations felt in all places.

 

The high Three different issues that occurred in China final week

 

#1. China’s Central Bank points new ‘standards’ for blockchain fintech functions

Despite the People’s Bank of China’s frequent updates on DCEP, it hardly ever points any statements on blockchain. But July 22nd, the silence was damaged and PBoC  issued a “standard” that required all blockchain functions within the monetary sector to stick to “technical, performance and security” requirements.

The purpose of the requirements is to make sure that blockchain functions observe sure ranges of threat administration, safety audit, privateness safety, and different greatest practices. Data privateness was regularly talked about, as was cryptography. This is all in step with China’s push towards its home-grown encryption standard.

But are there any actual implications for blockchain growth companies? Probably not, for now. The commonplace might be used as a filter or differentiator when technical firms bid for offers. But like many requirements in China, until there’s strict enforcement, many don’t observe the rule.

And after all, the usual says nothing about tokens.

#2: BSN: new integration nonetheless query for adoption

China’s high-flying Blockchain-based Service Network, which has promised to be inter operable, is strolling its speak by integrating with six public blockchains: Tezos, NEO, Nervos, EOS, IRISnet and Ethereum. Post-integration, builders on these blockchains can construct functions utilizing BSN’s cloud information middle, both in China and globally.

The concept of BSN is grand. By plugging into BSN, builders won’t solely have entry to completely different blockchains but in addition China’s home-grown enterprise blockchains, which can in all probability accumulate extra helpful information as blockchain use instances take off. Yet, similar to the web is split and Balkanized, the stunning concept {that a} Chinese blockchain infrastructure may bridge such a niche appears too good to be true.

#3: Beijing: Blockchained

Beijing is on a blockchain curler coaster. After saying its grand plan to be a blockchain-enabled city, on July 23rd, the federal government deliberate to conduct a pilot challenge to make use of blockchain for private stock registration and custody. But like many pilots, it didn’t give sufficient data to element the how and why and of the challenge.

As a local Beijinger, seeing the information that town goes full-blown blockchain is not any shock. Over the years, Beijing, because the capital of China, additionally strives to be its know-how middle. However, over time, Beijing’s tech hub function has been usurped by cities reminiscent of Hangzhou, the place Alibaba sits, and Shenzhen, the place Tencent is headquartered. The solely tech large it has is Baidu, which is slowly deteriorating, and Bytedance, which has its own problems.

Since China will host the 2022 Winter Olympics, perhaps blockchain can provide it a lift?

Do you realize?

“央妈” which implies “central mama,” is the nickname of China’s People’s Bank of China. The nickname isn’t just playful but in addition embodies the central financial institution, which controls the lifeline of financial coverage, in addition to every little thing crypto and DCEP in China.

LEAVE A REPLY

Please enter your comment!
Please enter your name here