How the ‘AntChain’ blockchain is taking China by storm

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For a few years, ringing that bell on Nasdaq was the American Dream of many Chinese language entrepreneurs. But just lately, with China and the US apparently disagreeing about every little thing, many firms have thought-about—or executed—a “homecoming” secondary itemizing in Hong Kong, along with their main itemizing in New York. The aim, after all, is to please the aspect that yields decrease danger 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 final word snub. In any case, why hassle to ring that New York bell when it’s important to “come house” to the motherland on the finish of the day?

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

However extra importantly, Ant Group can 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 huge 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 Web) will “reshape the world’s monetary system within the upcoming 20 years.” The juxtaposition between blockchain and the Web was a robust signal of Ma’s religion within the expertise, regardless of his skepticism of Bitcoin.

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

For instance, Ant signed a take care of the land division of Zhuhai, one of many seven financial zones on the southeast of China. The deal provides Ant a chance to supply a blockchain-powered resolution that connects authorities, banks, and end-users to share information corresponding to title deeds, credit score historical past, and mortgage purposes. The aim is to digitize the entire house buying course of and scale back handbook labor.

That is, actually, not the primary time Ant approached the land division of a authorities. Again 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 distinguished cities corresponding to 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.

Initially, successful governmental offers enable Ant to cross-sell and up-sell. Think about all of the adjoining cloud companies Ant can bundle and promote together with its blockchain options. Merely gathering information from shoppers who use their blockchain purposes would not directly enable Ant to promote extra monetary companies to end-users.

Second, most Chinese language cities present tax advantages to their expertise 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 reduce on the identical time.

And eventually, expertise issues. Entry to actual use instances permits Ant to rent and nurture blockchain specialists early on. It might rent engineers who may not be blockchain consultants instantly, however they’ll grow to be skilled and develop by these governmental offers. Nothing actually trains expertise higher than engaged on actual use instances.

“If you wish to get on a series, get on AntChain”

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

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

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

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 information” day by day. (Nobody 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 corporations, are already utilizing Alicloud, which is the underlying cloud infrastructure of Antchain. However the storyline is acquainted. In contrast to different blockchain suppliers that simply present blockchain, Ant is providing a complete suite of use-case targeted options that can bind their purchasers to nobody however Ant.

“It’s formidable what Ant Group has accomplished within the blockchain trade,” one crypto safety skilled instructed me. “They appear to be doing all of the boring stuff for the hardcore crypto followers,” he mentioned, which means that its blockchain play is strictly a utility providing, geared toward enterprise enterprise. “I imply, there’s no token economics, no fancy crypto incentive mechanism, no Defi… however guess what? They’ve made probably the most noise and struck probably the most offers up to now.”

Within the meantime, Ant Group has additionally been gathering patents on the aspect. It has topped the blockchain patents chart for the previous four years. Whereas the adoption questions nonetheless stay, Ant has extra assets than another gamers to both discover new purchasers or onboard their current SMEs.

Going international?

Regardless of being born and raised in China, Ant Group has grown far exterior of its motherland. Its consumer-facing enterprise is just not solely serving Chinese language vacationers exterior of China by offering cost options to native companies, so Chinese language vacationers pays straight with their Alipay app whereas purchasing internationally. It additionally straight participates in getting native banking licenses, corresponding to a digital one in Singapore.

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

Two years in the past, that remittance service would possibly appear like a easy use case. However China’s DCEP is more likely to empower actual cross-border remittance. Couple that with the Blockchain-based Service Community (BSN), which may simply combine Ant’s enterprise blockchain, and China’s blockchain ecosystem out of the blue turns into a vital, worldwide powerhouse.

The phrase “ant” is expensive to Ant Group’s journey. The founding staff believes that “small is gorgeous, small is highly effective.” That could be true within the early days. However now the ant is changing into extra just like the elephant, and each transfer it makes causes reverberations felt in every single place.

 

The highest Three different issues that occurred in China final week

 

#1. China’s Central Financial institution points new ‘requirements’ for blockchain fintech purposes

Regardless of the Folks’s Financial institution of China’s frequent updates on DCEP, it not often points any statements on blockchain. However July 22nd, the silence was damaged and PBoC  issued a “normal” that required all blockchain purposes within the monetary sector to stick to “technical, efficiency and safety” requirements.

The aim of the requirements is to make sure that blockchain purposes observe sure ranges of danger administration, safety audit, privateness safety, and different greatest practices. Information privateness was incessantly talked about, as was cryptography. That is all consistent with China’s push towards its home-grown encryption normal.

However are there any actual implications for blockchain growth corporations? In all probability not, for now. The usual might be used as a filter or differentiator when technical firms bid for offers. However like many requirements in China, except there’s strict enforcement, many don’t observe the rule.

And naturally, the usual says nothing about tokens.

#2: BSN: new integration nonetheless query for adoption

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

The concept of BSN is grand. By plugging into BSN, builders won’t solely have entry to totally different blockchains but in addition China’s home-grown enterprise blockchains, which can most likely acquire extra helpful information as blockchain use instances take off. But, similar to the web is split and Balkanized, the beautiful concept {that a} Chinese language 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 metropolis, on July 23rd, the federal government deliberate to conduct a pilot venture to make use of blockchain for personal inventory registration and custody. However like many pilots, it didn’t give sufficient info to element the how and why and of the venture.

As a local Beijinger, seeing the information that the town goes full-blown blockchain is not any shock. Over time, Beijing, because the capital of China, additionally strives to be its expertise heart. Nonetheless, over time, Beijing’s tech hub position has been usurped by cities corresponding to Hangzhou, the place Alibaba sits, and Shenzhen, the place Tencent is headquartered. The one tech big it has is Baidu, which is slowly deteriorating, and Bytedance, which has its personal issues.

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

Are you aware?

“央妈” which implies “central mama,” is the nickname of China’s Folks’s Financial institution 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.

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