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WeChat bans crypto transactions of Chinese token services

WeChat bans crypto transactions of Chinese token services

May 7, 2019 | AtoZ Markets – China’s most popular chatting platform, WeChat, has recently updated its payment policy, in which it included terms that may negatively impact the token services on the platform.

In the light of the new payment policy updates, expectations are that merchants who provide token and fundraising services on the platform are likely to to get dramatically affected.

Dovey Wan, one of the prominent pro-crypto investors and influencers in the digital assets’ community, tweeted expressing her opinion regarding the new update, where she pointed out that the “local liquidity” will be poorly impacted, given the severity of OTC transactions that take place on WeChat.

“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”, said Wan in her tweet.

Based on the new update, starting from May 31, any transaction that is involved in cryptocurrencies, online gambling, or pornography will result in terminating the accounts associated with it, given the aforementioned domains were identified as “illegal business” according to the messaging app’s update.

The crackdown on cryptos may have individual interests

The recently-made step is nothing new to China, as the country started its crackdown on mining cryptocurrencies, running ICOs, operating relevant exchanges and related type of trading, more than two years ago, with the government’s grip getting tougher on the market more today.

It is worth reminding in that context that the Chinese government had shut down many WeChat accounts for violating the platform’s agreement terms.

Procedures like the above-mentioned may result in crypto prices to fall.

Back I September 2018, bitcoin prices drastically fell from $7,300 to under $6,300 after heavy censorship that was taken against WeChat accounts.

On his turn, Changpeng Zhao, CEO of Binance, commented on Wan’s tweet, saying: “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.”

Zhao reads that the current crackdown might be a push for WeChat users to move to WeChat Pay, not excluding that the overall platform might end up being under the government’s crackdown sooner or later.

“Honestly, it would be hard to beat WeChat pay if they are relatively open. (The UX is good). But more and more restrictions are forced upon them (probably not their own choice), Zhao concluded.

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.

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