An official statement from Alipay on October 28 put an end to claims circulating in the digital asset market. The Chinese payment platform issued an open denial regarding any endorsement or authorization of crypto transactions through third-party platforms. In the same statement, Alipay warned users to remain cautious of virtual asset transactions utilizing its network, emphasizing that all partnership claims are unauthorized and false.
The public denial came in response to an announcement on October 27 by peer-to-peer (P2P) marketplace Peer. In its beta testing phase, Peer introduced a Chinese yuan payment option via Alipay to facilitate the buying and selling of the USDC stablecoin. Peer’s move to include yuan payment options triggered an immediate reaction from Alipay management.
Subsequent clarifications from Peer revealed that listing the payment option was done without any formal partnership agreement between the two companies.
Escrow Mechanism Without an Official Partnership
Peer clarified that its service does not have an official partnership with Alipay. The platform’s operations rely on direct peer-to-peer transfers between user accounts, akin to routine everyday remittances between individuals using yuan balances.
To facilitate asset exchanges, Peer relies on a smart contract escrow mechanism. Under this workflow, sellers must first deposit the USDC stablecoin into the escrow system. Once the buyer transfers yuan to the seller’s Alipay account and the payment is confirmed, the smart contract releases the USDC to the buyer’s wallet. This escrow setup holds the crypto balance until the fiat payment is confirmed completed.
107 Transactions Under China’s OTC Ban
Operational data from Peer indicates limited transaction volumes throughout the testing period. From the start of the trial run on August 21 until the public announcement in October, Peer logged 107 completed transactions across 45 buyers. Total trading volume reached $7,094, with an average value of $66.30 per transaction.
Alipay’s firm stance reflects the ongoing enforcement of mainland Chinese authorities’ strict ban on crypto asset trading and over-the-counter (OTC) transactions. Domestic regulators strictly prohibit any exchange between local currency and crypto tokens.
For Alipay account holders, this firm stance sets a clear boundary: everyday payment rails cannot serve as a bridge for virtual asset transfers, even when transactions occur directly peer-to-peer.
Reported by crypto.news.
Read also: What Is DeFi (Decentralized Finance)?
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
