Trump Administration Targets Ant and Tencent for Digital Payment Platform Restrictions

U.S. officials fear that global fintech platforms could give China access to banking data for hundreds of millions of users.
Steven LernerOct 07,2020,22:56

Ant Group and Tencent Holdings (OTC: TCEHY) could face potential restrictions in the United States due to national security concerns over their digital payment systems, according to Bloomberg.

U.S. officials fear that the fintech platforms could dominate global digital payments and give China access to banking data for hundreds of millions of users.

The subject has been discussed in the White House in recent weeks.

However, President Donald Trump has not been a part of these internal discussions due to his bout with Covid-19. Any final decision on this matter is a long way off.

Despite the news of potential restrictions, Tencent stock ticked up 0.75% on Wednesday.

And even if the Trump Administration decides it wants to take action against the payment platforms, the legality of implementing such restrictions is unclear.

Trump could sign a new executive order banning the platforms, similar to the previous ban on TikTok and WeChat. However, that ban was halted by the courts which might prompt Trump and team to try another approach.

In a statement, Ant Group says that it is not aware of any administration discussion and that its mission is to “contribute to economic growth and job creation.”

“Ant Group’s business is primarily in China and we are excited about our growth prospects in the China market,” the company says.

Tencent and the White House did not respond to Bloomberg’s requests for comment.

Jack Ma’s Ant Group is nearing a potential dual listing in Hong Kong and Shanghai’s STAR Market this month. The company is seeking an initial public offering of $35 billion at a $250 billion valuation in what might become the largest IPO in history.

Rumors of restrictions against Ant and Tencent are just the latest chapter in the escalating economic feud between the U.S. and China. While the move would certaintly hurt China, it would also hurt U.S. investors who have backed Ant; Silver Lake Management LLC, Warburg Pincus LLC, and Carlyle Group Inc. invested at least $500 million each in Ant , according to people familiar with the matter as cited by Bloomberg.

Equally important, such a move by Trump could provoke an equal if not greater retaliation from Beijing.

Topics:ant, tencent,
READ MORE
SUBSCRIBERS ONLY
MOST READ
LATEST NEWS