News from China reveals that Chinese instant messaging giant, WeChat, has prohibited bitcoin and cryptocurrency transactions, following an upgraded payment policy. This latest move by the company would adversely affect over-the-counter (OTC) and peer-to-peer traders who depend on these platforms to do business.
WeChat’s ban further reveals that China is not relenting on its effort to ban virtual currencies in the country.
No More Bitcoin and Cryptocurrency Trading
Tencent-owned Chinese messaging app, WeChat, updated its payment policy on May 7, 2019, which stated that bitcoin and cryptocurrency transactions were prohibited on the app. The announcement further stated accounts involved in bitcoin and cryptocurrency transactions would suffer termination.
The new policy, which comes into effect on May 31, 2019, will serve a big blow to traders who rely on over-the-counter (OTC) and peer-to-peer (P2P) platforms to carry out their businesses.
In Wan’s words:
“Given most OTC transactions are happening in WeChat, this may impact local liquidity to quite some extent.”
Urgh, Wechat just updated its payment policy .. merchant can’t serve any token issuance/fund raising or crypto trading activities, otherwise account will be terminated— Dovey Wan 🗝 🦖 (@DoveyWan) May 7, 2019
Given most OTC transactions are happening in wechat, this may impact local liquidity to quite some extent pic.twitter.com/TdNIO6cggS
In August 2018, WeChat had shut down accounts belonging to several cryptocurrency platforms. Some of the delisted companies included Houbi News, Cannon Rating, and Firecon Information among others.
In its defense, WeChat stated that the accounts went against China’s laws governing instant messaging services, by providing the latest news concerning virtual currency and blockchain technology.
Binance CEO, Changpeng “CZ” Zhao, also reacted to the announcement. According to CZ, the news wasn’t entirely negative, as it could encourage massive cryptocurrency adoption. The Binance founder opined that the decision was likely forced on the company.