Alipay Denies Supporting USDC Trading After Peer Launches Yuan Payment Option
Alipay has denied supporting cryptocurrency trading through its payment network after peer-to-peer platform Peer introduced a beta feature allowing users to buy and sell USDC through Chinese yuan transfers using Alipay. The clarification highlights the difference between a payment method advertised by a third-party platform and services officially authorized by the payment provider.
According In a statement posted on X, Alipay said it does not provide virtual currency trading services and rejected unauthorized claims connecting its services to third-party cryptocurrency platforms. The company also urged users to protect their accounts and funds when encountering advertisements promoting cryptocurrency purchases through its network.
Peer announced the payment option on October 27. However, Alipay's statement does not indicate that it has approved or endorsed the arrangement.
How Peer’s USDC Trading Feature Works
Peer describes its beta feature as a process involving cryptocurrency escrow and a separate yuan payment. Under the arrangement, a seller deposits USDC into an escrow contract before the buyer transfers the corresponding amount in Chinese yuan.
After the payment is verified, the contract releases the locked USDC to the buyer's cryptocurrency wallet. The mechanism holds the digital assets during the transaction, while the yuan payment is handled separately through the payment service.
Although Peer lists Alipay as a payment option, that listing does not establish that Alipay participates in or authorizes the cryptocurrency transaction. The payment provider's denial directly challenges any implication that its network officially supports Peer’s USDC trading service.
China’s Cryptocurrency Restrictions Create Regulatory Risks
The dispute comes amid China's restrictions on cryptocurrency-related activities. In September 2021, China's central bank classified cryptocurrency-related transactions as illegal financial activities, creating regulatory constraints for domestic payment providers.
Transactions involving cryptocurrency and Chinese yuan remain subject to regulatory scrutiny under this framework, including arrangements involving transfers between individuals. Payment services such as Alipay must account for restrictions associated with prohibited cryptocurrency activity.
The regulatory environment makes the distinction between a third-party platform's advertised payment method and a payment provider's official authorization particularly important for users considering such transactions.
Users Face Potential Account and Payment Risks
People attempting these transactions may encounter payment reviews, account restrictions or disputes involving transfers to unfamiliar counterparties. Peer’s escrow mechanism can hold a seller’s USDC, but it cannot reverse a yuan payment that has already been completed through Alipay.
Additional concerns arise when third-party verification tools request access to account information, potentially exposing users to financial data and transaction security risks.
The feature remains in beta, and its availability depends on Peer’s platform arrangements. Alipay has advised users to verify whether payment services are authorized rather than assuming that a third-party listing represents official support.
Writer: Marcus RenfieldCrypto Market Analyst & Onchain WriterMarcus Renfield covers cryptocurrency markets with a focus on onchain data, Bitcoin price action, and emerging market narratives. His writing examines how capital flows, network activity, and broader market structure influence short- and medium-term trends.He aims to provide clear, data-informed analysis for readers seeking a deeper understanding of crypto market dynamics.