China’s most popular messaging app, WeChat, will ban crypto trading and transactions on apps by the end of May. The change was discovered when individuals had discovered that WeChat had updated its payment policy.
The new update reads only affects merchants and corporate users, and not retail users. It reads,
You may not engage in Internet gambling, pornographic platforms, Internet sales lottery platforms, illegal foreign exchange, precious metals investment trading platforms, illegal securities and futures trading platforms, token issuing financing and virtual currency trading platforms directly or in disguise.
Dovey Wan, founding partner of crypto firm Primitive, tweeted about the development, talking about the extent of OTC transactions 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 pic.twitter.com/TdNIO6cggS
— Dovey Wan 🗝 🦖 (@DoveyWan) May 7, 2019
Binance CEO, Changpeng Zhao, responded to this user, and tweeted that this development is good for the market and industry in the long-term,
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
China has taken a strict approach to ICOs, STOs, and mining in recent times. The nation recently banned mining in its entirety, and called STOs and ICOs “solicited illegal financial activities.” On the other hand, China has been promoting blockchain use cases as well, including on state television channels that see a vast audience.