The Fintech Boom: When All the Money Is on the Line

Andy Snyder|November 5, 2020

Want to see the dangers of a government gone wild?

Want to see what happens when the state takes control?

Keep reading.

It’s proof that the fight for economic freedom is one worth enduring.

Last week, you may recall, we shared our thoughts on the biggest IPO in history. After years of building his business, Jack Ma was supposed to cash out today as his mega-fintech known as Ant Group made its public debut.

It was to be a big win for the billionaire and Chinese markets.

The IPO was valued at $37 billion… but more than $1 trillion was offered up as demand for the hot company and its new shares soared.

But amidst the headlines here at home was a dire one for supporters of economic freedom. Most folks never saw it.

T-R-O-U-B-L-E

After calling Chinese banks “pawn shops” earlier in the week, Ma got himself in trouble with China’s money masters. Just days before the record-shattering IPO, they wagged their finger and called the entrepreneur to their offices.

What was said, we don’t know.

But we do know the IPO is off.

China did what any goon would do. It blamed a sudden change in the rules.

Despite months of preparation and financial maneuvering, the government changed its mind at the last minute and forced the deal off the table.

Not only did Ma lose billions of dollars, so did the company that owns a third of Ant… Alibaba (BABA).

Its shareholders – many are American – lost a collective $70 billion in wealth as shares dipped 8% on the news.

So what gives?

Why did China suddenly lash out at one of its most successful citizens?

Ah… you know the answer.

No government – not a democratic republic, not a socialist state and certainly not the communists – likes competition.

And when Ma lashed out at banks this week, the folks in China realized they had a threat.

Digital Control

You see, Ant is China’s largest payment processor. Where plastic is the transaction of choice here in the States, it’s Ant’s Alipay in China. The app is at the center of the culture’s financial universe – used for everything from managing bank accounts to ordering food and even buying insurance.

But it’s also making waves in another hot space… crypto.

Folks looking to buy into the Ant IPO were excited to get a stake in more than 2,300 blockchain-related patents.

Of them, there are two we suspect have the eye of Beijing… especially as it looks to quickly roll out its own form of digital money.

The first allows Ant to be a secondary issuer of a digital currency. And the second, this is important, focuses on technology that allows Ant to restrict the flow of digital money.

Again, the government doesn’t like competition.

With this technology and the patents to protect it, Ant not only makes itself the center of the digital world but also pushes others out of the way.

We don’t suspect Beijing will force the company to hand over its patents or technology, but given the haste at which the country wants to roll out its new digital yuan, we imagine any future IPO will happen only after Ma and Beijing are playing nicely.

Digital Freedom?

There are some scary things in all of this.

Even if you’re not an investor, the smack to the face of freedom is obvious. China just ripped billions of dollars out of the hands of folks all across the globe.

Worse, though, is what’s at stake here.

There’s one reason China is so eager to move to a digital currency… control.

By tapping into the technology Jack Ma has used to build his empire, Beijing can track the flow of money in real time. It can see who is buying what. It can see the price they pay. And, according to the patents, it can shut you down with the flip of a switch.

Given all that’s at stake and the tremendous progress that’s been made in just the short amount of time since Ant filed for its IPO, it’s no surprise China is pulling on the reins.

This is a huge trend the country can’t afford to mess up.

If you need a distraction from the political drama… if you need yet another reason Big Government leads to big problems… pay attention to the fintech space.

It will be one of the hottest investing stories of the next decade.

Billions in profits are up for grabs… but all the money is on the line.

Do you have questions about the fintech boom, where it’s headed and the opportunities in it? Send them to mailbag@manwardpress.com.