WeChat, the dominant and widely-used social media platform and messaging application in China, operated by the technology giant Tencent, updated its payments policy according to which it is going to terminate user accounts which are included in crypto trading.
The updated payment policy of WeChat bans virtual crypto transactions
According to some sources which are familiar with this matter, the management of WeChat made revisions to its payment policy. The new policy of WeChat will prevent merchants on the platform from engaging in activities related to cryptocurrencies, such as crypto trading.
This messaging giant has updated the payment service on the 30th of April, emphasizing that merchants that use its service shall not, among some other things, either directly or indirectly be included in any ICO activities or operating virtual currency trading.
With this new policy, which will take effect on the 31st of May, WeChate is going to end payment services for the merchants who are found of the violation; however, the policy update didn’t label activities related to cryptocurrencies, such as illegal transactions, a fact which was misinterpreted by several Chinese crypto media.
The notice of WeChat also stated that individuals or companies that are trying to promote or to conduct crypto token sales are going to have their accounts suspended. The users of WeChat are even prohibited from exchanging and uploading pornographic images. Online gambling is also not permitted on this social media platform.
Changpeng Zhao commenting on the matter
Commenting on this particular matter, the CEO of Binance – the largest digital asset exchange by trading volume – named Changpeng Zhao, said that the management of WeChat probably had no other choice, as they were perhaps pressurized by the government of China to prohibit any crypto transaction.
He even added that it is going to be challenging to beat WeChat Pay when talking about the processing payments in a quick, as well as cost-effective manner. He even noted that WeChat possesses a good UX/UI and hadn’t placed too many restrictions on the kinds of activities permitted on the platform – until recently banning cryptos.
As WeChat is a dominant network for setting over-the-counter or OTC transactions and trades in China, the ban on cryptos could have adverse effects on the people who use WeChat Pay as one of the options for transacting the Chinese yuan. Some exchanges such as OKEx and Huobi offer their platforms for OTC market makers and individual users to place big and even ask orders to exchange fiat for crypto, and the opposite.
Moreover, it is also significant to note that the payment policy update is actually addressed to merchants on the WeChat Pay, referring to the account holders that registered as merchants or corporate users, opposite to the retail individuals.
That being said, the payments policy update follows the long-time stance of WeChat on banning users from utilizing the platform to engage in some transactions and activities related to cryptocurrency.
The Great Firewall of China encouraged the ban
Since August 2018, the payment affiliate of Alibaba, called Ant Financial, and WeChat, together took some efforts to monitor, as well as suspend user accounts which are under suspicion of being involved in some cryptocurrency trading activities.
The payment policy and ban on cryptos could potentially have negative impacts on the liquidity pools in mainland China. Last year in September, one self-taught contemporary artist, born in the United Kingdom, had sold an extensive collection of his artwork for crypto through WeChat.
The government of China is famous for censoring or even entirely blocking most major websites including Google, Facebook, and even YouTube.
The new ban is enforced through the Great Firewall of China, which is continually updated to restrict access to internet sites which could interfere with the political and economic system of the nation.