Regulations

WeChat shuts down crypto trading as china battles crypto ban

WeChat shuts down crypto trading. The Chinese dominant messaging application, WeChat, and which is powered by Tencent, has reviewed its payment policy hence stopping merchants from conducting crypto related financial activities. WeChat application is mostly used for over the counter transactions.

On 30th April, WeChat adjusted its payment service protocol that prohibited the merchants from using the service to conduct any activity indirectly or directly operating virtual currency trading or offering services.

The new policy takes effect on May 31. The massaging giant will terminate payment services to merchants that are breaking the rules. However, crypto-related activities outlined in the privacy policy did not mention illegal transaction.

Binance’s founder and CEO, Changpeng Zhao (CZ), believes the company was forced to apply the new policies. He went ahead to say that the change in policy is a “classic example of short term pain long term gain. “  In his last remarks, CZ stated that if it wasn’t the restrictions, WeChat’s payments services can have almost no competitor in terms of user experiences.

Over one billion unspecified currency volume on daily basis is reportedly registered by WeChat Pay. While the total subscribers were 1.098 billion by the end of 2018. WeChat is also popular among the elderly between the 50 and 80 years age group.

OTC crypto traders seems to be targeted by another action which is against the crypto traders using the messaging platform. WeChat is used by a large number of traders to transfer local currency to OKEx and Huobi which are crypto exchanges. Huobi and OKEX exchange platforms provide OTC trading to swap Chinese Yuan to crypto and vice versa.

It’s the second time Ant Financial (an affiliate company of Alibaba) and WeChat are placing crypto ban on crypto traders messaging application. The initial ban was initiated in august last year.

As WeChat shuts down crypto trading, do you think this a blow to the already weak Chinese crypto market?

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coinmag

Philip is an experienced blogger keen on staying updated with trends and news surrounding the blockchain and Bitcoin space. With several years of freelance experience in various industries, Philip brings his knowledge and experience into the crypto space.

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