JACK MA, the Chinese Jeff Bezos, has been missing these past few months, prompting many to speculate that he may have been imprisoned (or worse) for criticizing China’s financial sector, and comparing it to “pawnshops.”
Well, he reappeared recently, right on time to reach an agreement with China’s regulators over Ant Group’s operations.
From NDTV.com:
“Ant’s restructuring is part of a broader government campaign to increase supervision of the financial and technology sectors. Regulators have in recent months targeted everything from health-care crowdfunding to consumer lending. In January, they proposed measures to curb market concentration in online payments, where Ant and Tencent Holdings Ltd. are the biggest players.”
For those who don’t know, Ant Group is the most well-known digital payment platform in China, and the Chinese Communist Party’s (CCP) move to control it is proof that the people in charge are wary of its potential threat if left unregulated.
The CCP isn’t the only government who wants to put a leash on financial technology. The US and various major economies do it too, and this is because FinTech has the potential to disrupt financial systems.
Theoretically, they have the capacity to make legacy financial institutions, like banks, to become obsolete by removing the need for middlemen to conduct transactions.
You see, Financial Tech has a net decentralizing effect, particularly those which are integrated with the newest cryptocurrency technology. This is why governments want to control it, because governments (particularly large ones) are wary of the plebs having too much power vis-à-vis their financial sectors (i.e. banks, investment firms, etc…).
Governments can control banks and to a lesser extent investment organizations. If they do something bad (for the country’s elite), governments can arrest their chief executive officers, or slap them with fines.
This isn’t true with FinTech, because even though companies like Ant Group aren’t groundbreaking, they have the potential to become more and more disruptive as new technology comes. This is why the CCP came down on Ma’s neck, and why the Chinese government wants to put Ant Group under control.
I don’t know how this will play out, but I hope that FinTech innovators will be able to come up with new ideas to keep the industry one step ahead of government and oligopolistic control./PN
