Wechat, the largest Chinese messaging and payment platform, has made major changes to its payment policy by banning cryptocurrency transactions in its channels.
Crypto-currencies are banned from the platform
Entering into force at the end of May, this new rule prohibits merchants from operating in cryptocurrency activities, ranging from the issuance of tokens to the crypto-trading service.
From this date, those who continue their activities related to cryptocurrencies will end up with their accounts closed.
Dovey Wan, the founding partner of Primitive Ventures, who was the first to report this update, argued that this policy change could severely impact the liquidity pool in the region given that WeChat is the crypto channel of transactions. the most dominant OTC currency in China.
This ban on WeChat does not only concern the cryptocurrency sector, but will also affect transactions related to online gambling and pornography.
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
Given most OTC transactions are happening in wechat, this may impact local liquidity to quite some extent pic.twitter.com/TdNIO6cggS
— Dovey Wan 🗝 🦖 (@DoveyWan) May 7, 2019
A measure taken under pressure
The abandonment of cryptocurrency transactions of the Chinese mail pillar could suggest that the latter has succumbed to pressure from the government, which has always adopted particularly strict rules on cryptocurrencies.
This is also what Changpeng “CZ” Zhao, the CEO of Binance, wrote in his tweet:
“It was probably not a personal choice of WeChat.”
This is a classic example of short term pain, long term gain.
It is inconvenient for people short term, and they take a hit. But long term, it is precisely this type of restriction of freedom that will push people to use crypto. Not a bad thing.
— CZ Binance (@cz_binance) May 7, 2019
Let us remember that in the past, the Chinese government has already exercised its authority over WeChat in order to irritate the crypto-community of the country.
In August 2018, the government repressed several WeChat public accounts , claiming a violation of the terms of the messaging platform.
However, CZ submits that these new restrictions could create an opportunity for other companies to share WeChat’s share in this sector.
What do you think about WeChat’s payment policy reform? Comment in the comment section below.