Search ForexCrunch
  • Update WeChat prohibits merchants from accepting cryptocurrency transactions.
  • “This is a classic example of short term pain, long term gain,” Binance CEO CZ remains positive.

The messaging app popular in mainland China WeChat in its recent policy update has put a ban on cryptocurrency trading and other merchant related activities. The application by Tencent has instructed that participating in such activities will lead to user accounts being terminated. The updated policy says that “merchants may not engage in illegal transactions such as virtual currency (trading)”

The new stand is likely to take effect on May 31. According to Primitive Ventures founding partner, Dovey Wan, cryptocurrency activities in the country including over-the-counter (OTC) trading takes place via WeChat. It is believed that the ban could affect local liquidity.

The current ban is not surprising as the country has already put a ban on engaging in activities related to cryptocurrencies. In fact, local authorities have in the past carried out crackdowns to expose those still trading cryptocurrencies.

The CEO of Binance said commented on the new policy 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.”

He added:

“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). Go #crypto!”