The US/China conflict over the future of money has just moved up a notch.
Yesterday, outgoing US president Donald Trump signed an executive order banning US users from accessing eight Chinese-operated mobile apps, including the popular payment services Alipay, owned by Ant Group and WeChat Pay, owned by Tencent.
Trump, who is due to hand over power to president-elect Joe Biden in two weeks’ time, said in a message to Congress that his order was justified because the “pace and pervasiveness” of the spread of Chinese software apps “continue to threaten the national security, foreign policy and economy” of the US.
The US president said the ban would apply to Alipay, CamScanner, QQ Wallet, SHAREit, Tencent QQ, VMate, WeChat Pay, and WPS Office.
Alipay and WeChat Pay both count over 1 billion users, mostly in China, with the two apps offering a range of consumer services to complement payments, including taxis, food, shopping and dating.
In recent years, the two apps have signed a number of deals with merchants overseas, primarily to support payments by Chinese tourists travelling abroad.
The dramatic success of China’s mobile phone-based payments technology has led to a push by consumer-facing American tech firms, notably Facebook, into money and payments.
Facebook’s attempts to launch its own money have so far met with rebuffs from global financial regulators, however.
President Trump’s move against Chinese payment apps mirrors a similar attempt last year to ban social media app TikTok by ordering Apple and Google to remove the app from their US app stores.
TikTok is widely used outside China and counts 800 million active users, outpacing LinkedIn, Twitter and Snapchat.
The anti-TikTok move was blocked, however, by a US federal judge in September. Separately, Trump ordered ByteDance, the Chinese owner of TikTok, to sell a minority ownership stake to US companies Oracle and Walmart.
The accelerating hostilities between the US and China over social media, digital payments and money come as the two superpowers jostle over geopolitical reach.
Since the second world war, the world has relied on a dollar-centric financial system, but this is starting to change.
According to technologist Dave Birch, China’s ongoing progress towards its own state-backed digital currency represents a significant threat to dollar dominance, especially if the new digital yu’an becomes accepted worldwide.
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