China’s Alibaba Considers Blockchain for Financial Cloud Service
It seems that even Jack Ma is hopping on the blockchain bandwagon. Alibaba’s Internet payment service, Alipay, revealed at Shanghai’s popular YunQi computing conference that it was considering blockchain technology for its cloud services platform.
In its Cloud Service 2015 Year in Review published on January 19, 2016, Alipay also highlights the blockchain and determines the future of Internet finance belongs to new technologies like the blockchain.
In the review, Alipayt notes how major financial institutions, such as Nasdaq, JPMorgan Chase, Citibank, UBS, Goldman Sachs, Santander, Barclays, Deloitte, are “marching” towards the blockchain technology, establishing their own test ledgers and/or investing in blockchain technology companies. Alipay notes that the experimental application of the ledger technology has begun in securities, banking, accounting and other industries, and that direct applications include payment and settlement, intelligent bonds, financial auditing.
While the technology is still in its early stages, Alipay reports that it is “actively exploring the blockchain’s profound impact on the financial industry.” The payment provider recommends large public financial clouds based on the blockchain, which “does not require servers” and facilitates distributed applications like smart contracts, mutual insurance and peer-to-peer funding.
As “one of the largest community blockchains”, Alipay sees itself as well suited to provide blockchain-based services. From its cloud platform, Alipay is certainly a financial technology, having since it was launched accumulated total payment volume of $520 billion and processed more than 42 billion transactions. With more than 400 million users, Alipay’s adoption of blockchain technology would be a tidal wave of mainstream acceptance.
Despite the wishful thinking of some observers in the Bitcoin ecosystem, discussions of Alipay fully integrating Bitcoin into their existing payment infrastructure seem far-fetched, unless the protocol magically scaled up. The Bitcoin network is not ready to absorb the massive volume of transactions, and China’s central government, highly concerned about capital flight, may have issues with the cryptocurrency’s integration into a payment platform with 50% of China’s online market and more than 70% of the mobile payment market. Instead, Alibaba will this year likely begin experimenting with a proprietary blockchain.