WeChat bans cryptocurrency trading – “not a bad thing”

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The leading messaging app in China, WeChat, has banned all of its merchants from engaging in crypto-related transactions.

WeChat, owned by giant Tencent, introduced the new ban on April 30th, 2019. The update to the Payment Service Protocol states that all merchants using the app’s services cannot be involved in any virtual currency trading transactions or any other cryptocurrency-related ones.

The new rule is expected to come into effect from May 31st, 2019. All users that do not follow the update, will be found guilty of violations. Interestingly enough, WeChat does not relate to cryptocurrencies as illegal.

More importantly, the new rule applies to users that qualify as corporate or merchant ones, thus retail users are excluded from the new update in the Payment Service Protocol.

According to press, the new ban could possible create local liquidity issues, as there are many OTC traders in the country that use WeChat Pay as one of their primary options for making transactions with Chinese yuan.

However, the ban is not surprising at all, given China’s stance of cryptocurrencies and all related virtual currency activities. And with the crypto crackdown, this is what the CEO of Binance thinks about the new WeChat rule:

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.

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