Jack Ma's fintech company plans to launch a stablecoin

The overseas branch of Jack Ma's fintech company is working to launch a stablecoin in a major financial center in Asia. This payment processing giant is looking to explore new growth points beyond its traditional fintech business.

According to reports, this Singapore-based subsidiary plans to immediately apply for a stablecoin issuance license after the relevant regulations in Hong Kong come into effect in August. As part of its blockchain expansion strategy, the company also plans to apply for relevant licenses in Singapore and Luxembourg.

This initiative marks the company's official entry into the cryptocurrency space. Last year, the company's global transaction processing volume exceeded $1 trillion. Notably, about one-third of this (approximately $333 billion) was processed through the company's blockchain platform, indicating that the company has a mature digital asset operational infrastructure.

The company's stablecoin program aims to enhance its cross-border payment and fund management service capabilities, leveraging blockchain technology to improve the efficiency and transparency of fund transfers. Currently, the company's blockchain platform supports a variety of tokenized assets from global banks and institutions and employs advanced privacy computing technologies, including homomorphic encryption and multi-party verification systems.

The timing is quite favorable, and the company is expected to seize the growing demand from institutional investors for stablecoins. As of May this year, the stablecoin market size has reached $243 billion. The company's existing banking partnerships lay a solid foundation for stablecoin operations, having established collaborations with several major global banks. This week, the company also announced a strategic partnership with a large German bank to jointly provide payment solutions and fund management services.

For the company, stablecoins represent a natural extension of its funds management business. Given the large volume of transactions processed for its affiliated e-commerce platform and external clients, this business has shown tremendous growth potential. The department's revenue in 2024 is expected to approach $3 billion and has achieved adjusted profitability for two consecutive years.

This expansion comes at a time when the company is seeking new growth drivers, as its online lending business in China has faced regulatory restrictions since 2020. The international division has established an independent board structure to prepare for a potential spin-off and listing. Industry analysts estimate that the valuation of this business in Hong Kong could range from $8 billion to $24 billion.

The company is entering the stablecoin sector, coinciding with the trend of large financial and technology companies widely embracing digital assets. In 2023, a well-known payment company launched its own stablecoin, marking the first significant move by a large financial services company in this field. At the same time, some asset management companies have also created tokenized money market fund products that function similarly to stablecoins.

Compared to other regions, the regulatory environment in Hong Kong and Singapore provides a clearer framework for stablecoin operations. The upcoming relevant regulations in Hong Kong and Singapore's advanced digital asset regulations offer institutional-level compliance pathways for companies seeking to operate legally in this field.