Trump Signs Order to Ban Alipay and Other Chinese Payment Apps

US President Donald Trump signed an executive order on Tuesday banning payment platform Alipay and seven other apps with links to China, saying the apps could access personal information from their users.

Separately, US officials are considering barring US citizens from investing in Alibaba Group, an affiliate of parent Alipay, and Tencent Holdings, a person familiar with the matter told Dow Jones. No decision has yet been made while the agency is debating the possible effect on the market, the sources said.

Tuesday’s executive order prohibits transactions using CamScanner, QQ Wallet, SHAREit, Tencent QQ, VMate, WeChat Pay, and WPS Office and Alipay, which are payment platforms owned by Chinese billionaire Jack Ma’s Ant Group Co.

The crackdown comes ahead of China’s launch of a central bank digital currency (CBDC), which is thought to have influenced China’s own crackdown on Ant Financial and other Jack Ma companies.

In October, speaking at an event in Shanghai Ma criticized China’s financial system and state-dominated banking sector, “We should not use the means to manage railway stations to regulate airports,” Ma said, “We cannot govern the future by means of yesterday. “

Since making those comments, Ma has kept a low profile and his Ant Group’s initial public offering has been suspended by regulators.

Industry watchers say the People’s Bank of China is using the digital yuan as part of a broader effort to curb the growth of Alipay and WeChat Pay.

The launch of the CBDC is also expected to hamper Alipay’s micro-lending business and provide financial services to the unbanked, as well as withdraw deposits for commercial banks.

China has accelerated its efforts on the CBDC front and appears to be well ahead of the US in developing a digital currency, according to analysts.

By going after Ant now and banning Alipay, the US could inadvertently help the Chinese government advance with its digital currency revolution as people have no choice but to adopt its payment system. The reason for the order is also odd, given that all kinds of apps in the US and elsewhere, whether financial or otherwise, have the power to access people’s personal information.

The executive order takes effect in 45 days and states that the application is banned because it poses a threat to US national security.

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