In his comments, Ma also dismissed Chinese banks as "pawnshops" giving loans out to companies "that do not need money. Alibaba is a Proxy for Ant Group IPO. Regulatory pressures have led Ant to temper its ambitions in certain areas since it was spun off from Alibaba in 2011. © 2020 Forbes Media LLC. Last year, Ant earned $2.7 billion in profit on $18 billion in revenue. The data also helps Ant and its partner banks determine who is likely to pay them back. Ant Group Set to Raise $34 Billion in World’s Biggest I.P.O. Yet the melding of finance and tech is attracting regulators’ interest everywhere, and Ant has not been spared the scrutiny. Chinese finance basically does not carry risk; rather, the risk comes from lacking a system," he told those gathered for a finance conference in Shanghai. Ant Group also runs one of the world's largest money market funds, drawing on unspent funds users leave in their Alipay payments accounts. China's bitcoin and blockchain-inspired digital yuan has been the subject of much speculation in recent months, with questions raised as to how it, and other digital currencies that are expected to follow, will affect the global financial system, the commercial banking industry, and central bank policy. "That’s pretty much as far as he can push without getting into serious trouble for such a speech," Changpeng Zhao said. The company, the parent of the Alipay mobile payment service, priced its shares around $10.30 apiece, according to documents released on Monday by stock exchanges in the two cities. It says it handled $17 trillion in digital payments in mainland China during the 12 months that ended in June. As the founding editor of Verdict.co.uk I reported. The IPO was expected raise an estimated $37 billion and boost Ant's market value to in excess of $300 billion. Earlier this year, JP Morgan warned China-led central bank digital currencies pose a "great threat" to U.S. geopolitical power and U.S. dollar hegemony. Disclosure: I occasionally hold some small amount of bitcoin and other cryptocurrencies. , is gearing up for the record-breaking $34 billion stock market listing of his financial technology company Ant Group. I write about how bitcoin, crypto and blockchain can change the world. hide caption. Jack Ma, the billionaire founder of China e-commerce giant Alibaba "China today needs policy experts, not paper pushers." The Alibaba online finance spinoff, which offers people in China a one-stop shop for loans, investments and more, will list shares in Hong Kong and Shanghai. Alibaba owns about one-third of Ant. In 2018, Ant called off a bid to buy MoneyGram, the money transfer company, after it failed to win the approval of American officials. The halt of Ant's IPO came after he made disparaging comments about China's regulatory environment and state banks. Ahead of the hotly-anticipated Shanghai and Hong Kong floatation, Ma has warned new "digital currencies," such as bitcoin and China's digital yuan, could be used to establish a new type of banking and financial system—and called for an overhaul of U.S.-led banking regulations. All Rights Reserved, This is a BETA experience. Hong Kong's bourse, where Ant was planning a dual listing, soon followed in halting the IPO. Jack Ma, the billionaire founder of China e-commerce giant Alibaba BABA, is gearing up for the record-breaking $34 billion stock market listing of his financial technology company Ant Group… "We will be in close communications with the Shanghai Stock Exchange and other regulatory departments regarding the next steps to listing," Ant Group said in a press release. Its Alipay app is China's largest mobile payment platform, handling an estimated $16 trillion in online payments last year. "Regulators have to be seen to reassert the primacy of the regulators and the need to preserve stability," said Duncan Clark, the chairman of consultancy BDA China about the suspension of Ant's IPO. At that price, the company would be worth around $310 billion, a market value comparable to that of JPMorgan Chase and more than that of many other global banks. The more people use Alipay, the more data it gathers about their spending power. Ant Group, spun off of Chinese tech conglomerate Alibaba and controlled by chairman Jack Ma, has become a formidable financial platform with assets that rival those of the world's largest banks. Shares of Ant's parent company, Alibaba, tumbled more than 9% after news of the suspension was announced. Alibaba founder Jack Ma is gearing up Ant Group's blockbuster China IPO. Ant Group, the Chinese financial technology titan, is set to raise around $34 billion when its shares begin trading in Hong Kong and Shanghai in the coming weeks, which would make its initial public offering the largest on record. It's not yet known how the looming digital yuan will work with China's popular commercial banking apps, with Ant Group's Alipay revolutionizing payments in China in just a few short years and now boasting a staggering 700 million monthly active users. I have worked and written for CityAM, the Financial Times, and the New Statesman, amongst others. The more people use Alipay to purchase lattes, for example, the more data it gathers about their spending power. It is a lender to small businesses, both online and off, that might otherwise be ignored by China’s big state-run banks. "And will disclose relevant information in a timely manner.". Ant's joint listing in Shanghai and Hong Kong was meant to boost the prestige of China's domestic exchanges and attract more public offerings from global tech firms, for whom the New York Stock Exchange still remains the premier bourse. What was supposed to be the world's largest initial public stock offering has been halted at the last minute. Like other giant internet companies, Ant says its strength lies in performing a large number of different tasks at once. As a result, many good companies have turned into bad companies.". You may opt-out by. Today, the company emphasizes that Alipay is merely the front door through which its users gain access to financial services. But regulators for the Shanghai Stock Exchange, where Ant was planning to list, abruptly suspended the offering on Tuesday, citing "major issues" with the group that "may fail to meet information disclosure requirements." ", Ma's speech pushed "a lot of buttons," according to Changpeng Zhao, the chief executive of bitcoin and cryptocurrency exchange Binance, who commented via Twitter and added he interpreted the comments as about "cryptocurrency and the future.". Ma, in translated comments, blasted regulatory curbs on innovation, suggesting the Basel Accords, which he described as "like an old people’s club," stifled innovation and should be overhauled to help a younger China thrive. Follow me on Twitter @billybambrough or email me on billyATbillybambrough.com. AFP via Getty Images Using Alipay at a market in Hangzhou, China. Ant Group, spun off of Chinese tech conglomerate Alibaba and controlled by chairman Jack Ma, has become a formidable financial platform with assets that rival those of the world's largest banks. Along with Ma, Ant's executive chairman, Eric Jing, and its chief executive, Simon Hu, were "summoned" by four financial regulators, including the state bank, according to a curt statement put out by the regulators on Monday. Ant Financial, a spinoff from the Alibaba Group, was set to raise $37 billion in an IPO that regulators abruptly halted. In the United States, Trump administration officials have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products, said three people with knowledge of the matter. I am a journalist with significant experience covering technology, finance, economics, and business around the world. For hundreds of millions of people in China, Alipay may as well be a bank. The indefinite suspension two days before the scheduled offering follows a regulatory dressing down of the group's chairman and majority owner Jack Ma on Monday, where Ant Group was asked to report on major issues regarding "changes in the financial technology regulatory environment," the Shanghai Stock Exchange said in a statement. Alipay has more than 730 million monthly users, more than twice the population of the United States. Ant Group Set to Raise $34 Billion in World’s Biggest I.P.O. Ant’s listing would also be larger than that of its sister company, the Chinese e-commerce giant Alibaba, which raised $25 billion when its shares started trading on the New York Stock Exchange in 2014. The Trump administration is mulling restrictions on Ant and its fintech rival Tencent over concerns their payment platforms threaten U.S. national security, it has been reported. I am a journalist with significant experience covering technology, finance, economics, and business around the world. Ant Financial, a spinoff from the Alibaba Group, was set to raise $37 billion in an IPO that regulators abruptly halted. It is their credit card, debit card, mutual fund and even insurance broker — all on a single mobile platform. In recent years, China has clamped down hard on fishy online lending and investing schemes. "After the Asian financial crisis, the risk control highlighted in the Basel Accords has been" the priority for regulators, he said, adding the world "only focuses on risk control, not on development, and rarely do they consider opportunities for young people and developing countries. "It's standard government muscle flexing. By comparison, PayPal has 346 million active accounts. Opinions expressed by Forbes Contributors are their own. BABA ", Additional research from Amy Cheng in Beijing, We Insist: A Timeline Of Protest Music In 2020. That has led to a complex and sometimes tense relationship with Chinese regulators, who see Ant Group as both a much-needed domestic innovator and rival to state financial institutions. Its vast pool of user data has allowed it to serve as an efficient matchmaker between smaller businesses and individual investors in need of a loan and traditional lenders. As the founding editor of Verdict.co.uk I reported on how technology is changing business, political trends, and the latest culture and lifestyle. After recent clashes between the U.S. and China over the likes of video sharing app TikTok and telecoms-equipment giant Huawei, China's digital yuan and similar digital currencies could be the next battleground. "China does not have a systemic financial risk problem. People visit a showroom of the mobile payment powerhouse, Ant Financial, in China in 2018. I have covered the rise of bitcoin and cryptocurrency since 2012 and have charted its emergence as a niche technology into the greatest threat to the established financial system the world has ever seen and the most important new technology since the internet itself.

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