The founder of Chinese consortium Alibaba, Jack Ma, on Saturday attacked financial regulations and the international banking system. The executive said that both would be stifling technological innovation in the area of fintech.
For Jack Ma, the current financial system should depend less on the big banks, so he believes that a new ecosystem in finance must be established. This new scheme should include, at its discretion, “lakes, ponds, streams and streams” that allow capital to be injected into different corners of the economy, according to a report by Bloomberg.
Amid the questioning, the businessman pointed out that cryptocurrencies or “digital currencies”, as he called them, could have a leadership role in building a new potential system for the next 30 years.
“Digital currencies can create value and we must think about how to establish a new type of financial system through digital currencies,” said Jack Ma. Comments came before what this week will be Ant’s initial public offering (IPO). Group, the Chinese financial services technology company and parent company of Alipay that is under the control of the wealthy executive.
China on its own route to digital currencies
According to Jack Ma, China should chart its own path on this issue. His message would point to the fact that the Asian giant must distance itself from global financial guidelines, among which it cited Basel regulations.
These banking supervision arrangements, first established in 1974, were viewed by Jack Ma as a “club of elders” that does not serve as a method of “regulating the future”.
The billionaire thinks that many of the world’s problems arise because of the banks’ attitude about risk controls and not talking about new developments, opportunities for young people and developing countries.
Regarding the banks’ business models, the founder of Alibaba believes that institutions should abandon the “pawnshop” mentality, which accepts guarantees to grant loans, according to a note from the Financial Times.
The executive’s comments come amid tests by China over what would be its central bank digital currency (CBDC), better known as the digital yuan or e-RMB (electronic renminbi). The project in the Asian country has been under development for years, but in 2020 there were already real experiences of transactions among its inhabitants.
CryptoNews recently reported that in several regions of China the free distribution of 10 million yuan has been authorized for a new test of the digital currency. Users who chose to participate in the tests received 200 yuan ($ 30) to make purchases.
As early as 2019, China was betting on becoming the first country to issue the central bank’s digital currency. The main reason for achieving this achievement would have been Facebook’s announcement to launch its own digital currency, Libra.