WeChat Updates Policy Statement: Bans Bitcoin Transactions
WeChat Updates Policy Statement: Bans Bitcoin Transactions
News from China reveals that Chinese instant messaging giant, WeChat, has prohibited bitcoin and cryptocurrency transactions, following an upgraded payment policy. This latest move by the company would adversely affect over-the-counter (OTC) and peer-to-peer traders who depend on these platforms to do business.
WeChat’s ban further reveals that China is not relenting on its effort to ban virtual currencies in the country.
No More Bitcoin and Cryptocurrency Trading
Tencent-owned Chinese messaging app, WeChat, updated its payment policy on May 7, 2019, which stated that bitcoin and cryptocurrency transactions were prohibited on the app. The announcement further stated accounts involved in bitcoin and cryptocurrency transactions would suffer termination.
The new policy, which comes into effect on May 31, 2019, will serve a big blow to traders who rely on over-the-counter (OTC) and peer-to-peer (P2P) platforms to carry out their businesses.
Dovey Wan, a founding member at Primitive Ventures, tweeted the news and stated that the ban might affect liquidity in China.
In Wan’s words:
“Given most OTC transactions are happening in WeChat, this may impact local liquidity to quite some extent.”
https://twitter.com/DoveyWan/status/1125667936335581190
In August 2018, BTCManager reported that WeChat had shut down accounts belonging to several cryptocurrency platforms. Some of the delisted companies included Houbi News, Cannon Rating, and Firecon Information among others.
In its defense, WeChat stated that the accounts went against China’s laws governing instant messaging services, by providing the latest news concerning virtual currency and blockchain technology.
Binance CEO, Changpeng “CZ” Zhao, also reacted to the announcement. According to CZ, the news wasn’t entirely negative, as it could encourage massive cryptocurrency adoption. The Binance founder opined that the decision was likely forced on the company.
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
In March 2018, Chinese regulators blocked social media accounts belonging to virtual currency exchanges in the country. OKex was one such exchange that was hit.
China Headstrong in its Fight Against Cryptocurrency
China’s anti-bitcoin and cryptocurrency stance has a long history. Following its blanket ban on ICOs in September 2017, the country continues to seek ways to shut down any virtual currency activity.
The Asian country’s negative attitude towards virtual currency has seen the emigration of home-based cryptocurrency exchanges like Binance and OKex to friendlier climes. China’s stringent policy on virtual currency also saw its citizens turn to OTC and P2P trading.
To further stifle the presence of virtual currency in the country, regulators cracked down on bitcoin exchanges by freezing bank accounts of major OTC platforms.
In April 2019, a publication emerged which revealed that China was planning to ban Bitcoin mining. According to the report, virtual currency mining and several other industrial processes were harmful to the environment and violated state regulations.
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