Tencent’s messaging app with over a billion of users, WeChat, has reportedly updated its payment policy, saying that users who take part in cryptocurrency trading will see their accounts terminated.
WeChat is the most popular messaging app in mainland China with a monthly user base surpassing 1 billion people.
According to new reports, the messaging giant has updated its policy, stating that “merchants may not engage in illegal transactions such as virtual currency (trading)” or issuing tokens. The new rule will reportedly come into force on May 31st.
Dovey Wan, a founding partner at Primitive Ventures, has noted that most of the over-the-counter (OTC) transactions in the country take place through WeChat. As such, this may have an impact on the local liquidity to certain extent. Last September, local Chinese media reported that prospective cryptocurrency investors used WeChat, as well as Alipay in order to engage in OTC trading, which gives further merit to Wan’s statement.
This isn’t the first hit cryptocurrencies took in 2019 in China. Earlier in April, Cryptopotato reported that the country’s State Planner intended to prohibit Bitcoin mining.
While the news may strike as a harmful one for the cryptocurrency industry and its further adoption, Changpeng Zhao, the CEO at Binance, remains entirely optimistic.
According to him, beating the messaging app’s payment system (WeChat Pay) would be hard as they have a very good UX. He also noted that the most recent update in their payment policy and the fact that it prohibits cryptocurrency trading is “probably not their own choice.”
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!
— CZ Binance (@cz_binance) May 7, 2019
However, Binance CEO also notes that this is a classic example of a move which will bring “short term pain and long term gain.” The executive outlines that the move is certainly inconvenient for people in the short term. However, when it comes to the bigger picture, it is exactly those restrictions of freedom which are going to further push people into using cryptocurrencies. “Not a bad thing.” – He concludes.