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Ant Group's Strategic Pivot Amid Regulatory Pressure

The move could potentially unlock value in its blockchain and other non-core operations. Also, Meta resists market meltdown, Aethir to supersize decentralized cloud empire, Ripple rides CBDC wave and crypto enthusiasts jump on alien bandwagon.

July 27, 2023

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In a strategic move that could have far-reaching implications for the digital asset industry, Ant Group Co., the fintech giant co-founded by Jack Ma, is reportedly planning a significant restructuring.

The company is considering separating its blockchain and database management services, along with its international business, from its core financial operations in China, according to a report by Bloomberg on Thursday. This move is seen as a precursor to Ant Group's application for a financial holding license in China and a potential revival of its initial public offering (IPO) in Hong Kong.

The restructuring comes in the wake of an almost three-year-long probe by Chinese regulators into Ant Group's operations, culminating in a hefty fine of 7.12 billion yuan ($995 million). The regulatory scrutiny and subsequent penalties have taken a toll on the company's valuation, which has plummeted from a high of $280 billion ahead of its scrapped IPO in 2020 to a current estimated value of $79 billion, Bloomberg noted.

The proposed restructuring could offer a lifeline to Ant Group, allowing it to focus on its core financial services in China while potentially unlocking value in its blockchain and other non-core operations. However, the move also raises questions about the future of these non-core businesses and their potential impact on the broader digital asset industry.

Ant Group's blockchain technology, AntChain, is one of the most widely used in China. By spinning off or selling this business, it could significantly impact the blockchain landscape in the country.

AntChain was initially known as “Ant Blockchain,” an in-house blockchain system that Ant Group launched alongside Alipay in 2017. It expanded to offer blockchain-as-a-Service (BaaS) to Ant Group’s partners in 2018. In July 2020, to push for further development, Ant Group officially split Ant Blockchain into a separate entity and rebranded the company as AntChain. Besides blockchain, AntChain is also involved in the development of Artificial Intelligence of Things (AIoT), risk control technologies, and other value-added tech services.

Ant Group's blockchain technology has been instrumental in promoting blockchain adoption in China. Any changes to its blockchain operations could impact the pace and scale of adoption. The restructuring is largely seen as a response to regulatory pressure. If regulators continue to tighten their grip on fintech companies' blockchain operations, it could stifle innovation and growth in the sector.

As Ant Group navigates these choppy waters, the company's strategic pivot offers a glimpse into the challenges and opportunities that lie ahead for businesses operating in the rapidly evolving digital asset space. It also underscores the growing influence of regulatory forces on the trajectory of the crypto industry, both in China and globally.

Elsewhere,

  • Meta's Metaverse Mojo Resists Market Meltdown: Despite a frosty crypto climate, Meta holds steadfast to its starry-eyed metaverse dream. CEO Mark Zuckerberg reaffirmed the company's dedication to building an immersive digital world, stating that the metaverse represents the future of online interaction. However, the success of this ambitious project hinges on the wider adoption and integration of blockchain technology, raising questions about the feasibility of Meta's vision in the current market climate.
  • Aethir Secures Funding to Scale Decentralized Cloud Infrastructure: The Singapore-based provider of decentralized cloud infrastructure has closed a pre-A funding round at a valuation of $150 million. The funding will be used to scale Aethir's services, highlighting the growing demand for decentralized solutions in the cloud computing space. But the key to Aethir's growth narrative lies in the wider embrace of decentralization, a hard nut to crack in the current market vortex.
  • Ripple Surfs CBDC Wave with Palau: Ripple is shaking hands with the tropical paradise of Palau, embarking on an expedition to pilot a Central Bank Digital Currency (CBDC). This tryst marks one of Ripple's maiden real-world forays into the CBDC stratosphere. The U.S. Dollar-backed Palau Stablecoin (PSC) will be issued on the XRP Ledger (XRPL), a carbon-neutral blockchain.
  • FDUSD's Bumpy Birth on Binance Amid Tech Hiccups: Hong Kong-based First Digital Group's newborn stablecoin, FDUSD, had a somewhat shaky hello to the world on Binance, courtesy of tech glitches with liquidity maestros. The ordeal underscores the minefield that fresh digital assets must traverse, especially when it comes to seamless harmony with established platforms. The deft resolution of these tech tremors is the magic key to a rosy future for FDUSD and its digital kin.
  • Crypto Degens Hitch a Ride on UFO Mania: Following a UFO hearing where ex-U.S. brass vouched for extraterrestrial tech, a swarm of over 50 alien-themed cryptos, including "UFO," "ALIENX," and "ALIENFI," has descended. Even though these interstellar tokens have mostly just been floating in zero-gravity, they underscore the crypto crowd's knack for riding the wave of trending chatter.

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