US Considers Sanctions on Chinese Alipay and WeChat Pay Payment Platforms

US Warns China's Electronic Payments Pose National Security Threat
Negative Impact on Ant Group IPO Ahead of Dual Listing in Hong Kong and Shanghai

[Asia Economy Beijing=Special Correspondent Jo Young-shin] Bloomberg News reported on the 7th (local time), citing sources, that the U.S. government is considering sanctions against Alibaba's financial subsidiary Ant Group and Chinese electronic payment platforms such as Tencent. The background for the consideration of sanctions is the concern that China's digital payment platforms could pose a threat to national security.

According to the news agency, discussions among senior U.S. officials regarding whether and how to impose sanctions on Chinese electronic payment platforms have accelerated in recent weeks.

Bloomberg reported that some officials from the Donald Trump administration gathered in the White House Situation Room on the 30th of last month to discuss this matter.

[Image source=Reuters Yonhap News]

U.S. officials are reportedly concerned that Chinese fintech companies, including Ant Group and Tencent, could dominate global electronic payments. The core worry is that the Chinese Communist Party could access personal and financial information of hundreds of millions of people.

If U.S. sanctions against Chinese electronic payment platforms such as Ant Group materialize, the U.S.-China conflict is likely to intensify further.

Ant Group plans to simultaneously list on the Hong Kong and Shanghai stock exchanges this month. If U.S. sanctions are confirmed, it will inevitably have a negative impact on the listing. Ant Group, which has secured over 900 million users, is known to have a corporate valuation of $250 billion (approximately 289 trillion KRW).

Experts estimate that Ant Group could raise $35 billion (about 40.5 trillion KRW) through the IPO.

It is also uncertain whether U.S. investors will be allowed to participate in the IPO. U.S. investment firms such as Silver Lake Management, Warburg Pincus, and The Carlyle Group have already invested at least $500 million in Ant Group since 2018.

The plans of U.S. investment banks such as Citigroup, JP Morgan Chase, and Morgan Stanley, which are the financial firms managing Ant Group's IPO, could also face setbacks.

However, Bloomberg reported that U.S. sanctions against Chinese electronic payment platforms have not been finalized. The process of finding a legally valid approach is encountering difficulties, and there is skepticism about the timing of the sanctions. It is unlikely to be used as material for the U.S. presidential election, and there is a possibility of judicial intervention.

Bloomberg also reported that there is no indication that the sanction review plans against Ant Group or Tencent have been reported to President Trump, who holds the final decision-making authority.

A source said that discussions among senior officials have not progressed since President Trump contracted the novel coronavirus (COVID-19).

This content was produced with the assistance of AI translation services.