Tweetstorm: Libra and WeChat Compared


(But first…) please note that none of the following should be taken as investment advice. See http://a16z.com/disclosures  for more info.

Similarity: WeChat and Libra both have the goal of payment accessibility. WeChat Pay spearheaded China’s transformation to a cashless digital society w/ 900M+ MAU, many underserved by traditional banks. Libra aims to bring price-stable money via crypto wallets to 2B+ people.

Ubiquitous mobile wallets is big for fintech and greater financial opportunity. While USD is relatively stable, other countries like Venezuela lack stable ways to preserve wealth. It also unlocks new business models, as seen in this post w/ @conniechan

Huge difference: currency/reach. WeChat Pay can be used in 49+ countries but the platform itself is limited to local fiat balances in China or Malaysia. By being a cryptocurrency not pegged to a single currency like RMB, Libra’s aim is to be used globally.

Huge difference: centralization. Libra will launch with 100 nodes (1 by Facebook). Developers and other ecosystem participants have less deplatforming risk than exists with WeChat (although it’s still more centralized than other cryptocurrencies like Bitcoin).

Kevin Werbach’s take on the importance of blockchain-enabled trust: “The benefits from re-establishing the trust it has lost would dwarf what it could squeeze out of mining the data.”

8/ That being said, centralization is not all bad for adopting new tech! WeChat incentivized online-to-offline payment adoption with $150M+ in subsidies in 2018 (Alipay spent $300M+)! But it also means they control the ecosystem.

Difference: Open-source. Unlike WeChat (and other fiat-based monetary platforms), the code that powers it is completely available for anyone to improve. In the event people are deplatformed, they can fork the code and create their own Libra alternative.

Similarity: Lack of anonymity. Libra is pseudonymous like Bitcoin and can be audited by third-parties or law enforcement, in contrast to completely anonymous products like Monero or Zcash (with shielded transactions).

So is Libra actually about emulating WeChat? There are clear differences, but the shared vision, with the potential of giving crypto wallets to the masses, may only be imaginable thanks to WeChat’s success in China.

In response to the Libra news, Tencent Chairman Pony Ma wrote, “The technology is mature, it’s really not difficult. It only depends on whether regulators allow it.” Going global ≠ open financial system, but there’s a lot to learn from studying their respective approaches.

Suggested reads:

The Real Reason for Facebook’s New Cryptocurrency — op ed by Kevin Werbach
Libra lessons from WeChat and QQ — podcast by Matt Brennan and John Artman
Can Libra replicate WeChat Pay’s digital payment dominance? — article by Nicole Jao

Ant Financial: Impact of China’s 2016 Clearinghouse Regulation

This is the second part of a two part series on Ant Financial. Click here to read the first part on Ant Financial’s history, ecosystem, and growth.

In a 2017 interview, Jack Ma stated very emphatically, “We have to step ahead of the regulators; we have to. Otherwise, we go nowhere.”1 This game of leapfrog between third party payment applications and regulators has helped served the Chinese market by letting the market decide the future of finance. Chinese fintech has clearly benefited from the boldness of companies such as Ant Financial and Tencent setting bold paths ahead of regulators, but now that regulators are getting involved, it is beneficial for the future of competition, mobile payments, and Chinese financial markets. In this blog post, will shift my focus to the implementation and effects of the 2016 clearinghouse regulation.

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Understanding Ant Financial: History, Ecosystem, and Growth

Alibaba founder Jack Ma famously professed that should the government desire, he would deliver Alipay to the state.1 He also said that because the state banks would not change on their own, Alipay would change them. What connects these two statements is the power that Ant Financial has accumulated by becoming an indispensable part of over 500 million citizens’ lives. It’s not beyond Jack Ma’s imagination that the overwhelming power of his private company would cause integration with the state to be inevitable.

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An Afternoon in Jiufen (一個下午在九份)

For our trip to Taipei, we were essentially given two days of freedom. Round trip transportation, a hostel, and tickets to the top of Taipei 101 were provided. The rest of the weekend we could schedule as we wished. This was great because I had spent five days in Taipei when I arrived in Taiwan, now I could venture elsewhere.

I headed to Jiufen, a mountainous area by the sea. During the late 19th century Jiufen’s population and wealth exploded as they experienced a gold rush, now it was mainly known as a pretty tourist town. Everyone knows it as the town featured on the movie Spirited Away.

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Pictures from Fo Guang Shan Monastery

Fo Guang Shan is the largest monastery in Taiwan, ground-breaking took place nearly 50 years ago. The Kaohsiung campus is sprawling, featuring now only shrines but also publishing houses, translation centers, and its own university. It’s a massive compound, but it doesn’t stop in Taiwan. Also known as the International Buddhist Progress Society, it is in over 170 countries and has a huge worldwide influence.

Our trip to Fo Guang Shan Monastery was more of a two-day guided tour than an actual temple-stay. It was a peaceful way to spend a weekend away from studying, the main highlight being our traditional dinner. Following are some of my favorite photos from our two days at Fo Guang Shan and Buddha Memorial Centre.

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Fo Guang Shan Monastery Traditional Dinner

For thousands of people, Fo Guang Shan is and will always be a holy place of worship. It also is also a tourist destination with a sense of commerciality and comfortableness. Five years ago I took part in a Korean temple-stay, which was bare-bones. At Fo Guang Shan I stayed on extremely comfortable, thick mattresses instead of a wooden floor. We woke up after sunrise instead of 4 am and we omitted the 108 bows activity. At this Buddhist temple opulence stood out to me, particularly strong presence of air conditioning with doors left open, spilling it outside.

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