On Monday, the FT carried a story about Alibaba opening a Money Market Fund in Hong Kong. The idea seems to be to offer savers in Hong Kong a Money Market fund with 4% interest compared to the 1% offered by Money Market funds today. They can do that because they will be investing the money in Mainland China.
The instinctive reaction is “who would trust Alibaba with their money?“, but note:
1. It will be a fully regulated entity, just like any other Money Market Fund.
2. Alibaba are NOT launching in America or Europe, where their brand is not yet trusted enough. I assume they will do so at some point.
This illustrates the blurring of lines in Fintech.
Google and Apple are also becoming major players in financial services. It’s one thing for Banks to worry about born-digital ventures from a garage armed with a few hundred million $ of VC money. It is quite another thing to worry about born-digital ventures armed with a market capitalization that is bigger than even the biggest banks.
Sounds of consternation is heard among the pigeons….