Jack Ma, the founder of Alibaba Group, praised the innovative nature of digital currencies and believes that they will create value in various economies
Jack Ma, the founder of Alibaba Group, recently addressed bankers and regulators at the Bund Summit in Shanghai. The now – retired founder and Chairman of the company spoke at length about various issues such as regulation and cryptocurrencies.
According to the eCommerce giant’s founder, digital currencies will play a crucial role in the future global financial system. He believes that digital currencies will help build a financial system needed in the next 30 years. Ma stated that “Digital currency could create value, and we should think about how to establish a new type of financial system through digital currency”.
His comments on cryptocurrencies came after he criticised the current regulatory efforts in the financial system. Ma pointed out that the regulatory efforts are stifling innovation rather than encouraging it. He stated that after the Asian financial crisis, regulators have focused on risk control as outlined in the Basel Accord. Hence, the world now focuses on risk control rather than development. Regulators don’t consider the opportunities for young people and developing countries, he added.
The Basel Accords is an international regulation for banks designed to reduce the global economy’s systemic risks. The last global financial crisis in 2008 led to the passing of Basel III norms, and the rules have been made stringent to counter the future economic crisis.
According to Ma, the Basel Accords are a set of rules to solve the financial problems operating for decades. However, the global financial system is changing, and there is a need to change how the regulators operate. Young people and developing countries turn to digital currencies, and regulators need to encourage development rather than stifle it. The developing countries need more innovation to build ecosystems to promote the healthy development of their local industries.
Ma retired from his role as the Chairman of the Alibaba Group in 2018 to go back to teaching. Despite leaving the company, Alibaba continues to expand with ventures in eCommerce, fintech and other sectors. Alibaba is currently one of the largest companies in the world by market cap.