Alipay, the digital arm of the famous Chinese e-commerce giant Alibaba, is the latest to declare an outright ban on transactions related to Bitcoin (BTC) and other cryptocurrencies.
Based in China, Alipay is a third-party mobile and online payment platform and since its establishment back in 2004, it has managed to become one of the most popular financial services companies. The platform’s success was granted considering it is a part of the Alibaba ecosystem, the multinational conglomerate company that has managed to capture the market well beyond the Chinese border.
On October 11th, in a series of tweets, Alipay announced its anti-crypto stance loud and clear. In the Twitter thread the financial services platform warned its users that the company keeps a close eye on over-the-counter transactions in order to detect any irregular behavior and to ensure compliance with relevant regulations
If any transactions are identified as being related to bitcoin or other virtual currencies, @Alipay immediately stops the relevant payment services
Cryptocurrencies have come a long way since Satoshi Nakamoto launched the first decentralized cryptocurrency, Bitcoin back in 2009. However, they haven’t been entirely accepted by several regulatory authorities and governments, China being one of them. The country declared war with the crypto ecosystem back in 2017 when it enforced a blanket ban on all initial coin offerings (ICOs), crypto trading and exchange operations as well.
Considering the facts that China is at odds with the crypto ecosystem and that Alipay is a Chinese platform, the question arises what fueled such reports in the first place that the platform had to publicly denounce cryptocurrencies.
There're several reports about @Alipay being used for bitcoin transactions. To reiterate, Alipay closely monitors over-the-counter transactions to identify irregular behavior and ensure compliance with relevant regulations. [cont'd…]
— Alipay (@Alipay) October 10, 2019
Did it spring out of some FinTech gossip or a simple word on the street? Quite the contrary, it can be charted back to one of the most popular cryptocurrency exchange platforms of the industry, Binance.
The exchange platform, in a recent attempt to spread crypto adoption and to bring in more revenue from Chinese consumers, it supposedly added support for two new fiat on-ramps, through popular messenger service WeChat, and through payment platform Alipay.
— CZ Binance (@cz_binance) October 9, 2019
According to reports on October 9th, the platform announced the launch of a P2P crypto trading service, with support for trading BTC, ETH and USDT against CNY (Chinese Yuan). Additionally, the new payment options will be accessible on the Binance mobile app. The rumors started the moment Binance CEO Changpeng Zhao (CZ) victoriously unveiled the news on Twitter.
However, it seems that Alipay was not onboard and strongly rebuked the exchange giant for attempting to implement it as a fiat on-ramp, in an all caps “NO” on twitter, a virtual slap on the face of the crypto sphere’s largest exchange platform.
NO, you cannot. https://t.co/J0YMTz3FZW
— Alipay (@Alipay) October 10, 2019
Following the Twitter thread, Alipay also went on to share an official statement on its Weibo account. Crypto venture capitalist Dovey Wan took a snapshot of the platform’s announcement and translating it in her tweet that read:
Alipay officially reaffirmed its “Prohibition of cryptocurrency OTC trading” on its Weibo today (auto translation below)
Starting from Aug, China OTC market has been slowing down quite a bit due to various actions taken by both payment channels and local police pic.twitter.com/z3ZqzyJpvn
— Dovey Wan 🗝 🦖 (@DoveyWan) October 10, 2019
Alipay’s rather harsh response to Binance might be because of the pressure from the Chinese government. Reports claim that even local police is taking “various actions” against crypto and Bitcoin transactions, it is highly likely that the platform did not want be caught in the crossfire, which could hurt its business in the end.
Be that as it may, Alipay did publicly clap back at Binance, clearly leaving CZ slightly ruffled and he tweeted back an explanation claiming that the announcement got lost in translation, which blew way out of proportion. His clarification tweet read:
Some confusion by some news outlets. @Binance is not working directly with WeChat or Alipay. However, users are able to use them in P2P transactions for payment.
It was a tough day for Binance, as soon after being torched by Alipay, WeChat joined in. The Chinese multi-purpose messaging, social media and mobile payment app, reaffirmed their stringent position on cryptocurrencies.
WeChat will never support cryptocurrencies trading, and has never integrated with any crypto merchant… We welcome any whistle blower to report such behavior.
This whole debacle if anything, reaffirms China’s stance on cryptocurrencies and their acceptance. A while ago the crypto community was expecting that the People’s Bank of China will launch its own central bank digital currency (CBDC). But the bank put those expectations to bed denying that the country is ready to roll out the new financial asset, and it will not be ready for it any time soon by the looks of it.