WeChat bans cryptocurrency transactions in its payment channels
Chinese social-media and payments app WeChat has updated its payment policy, stating that users who engage in crypto trading will have their accounts terminated.
The policy revision states that “merchants may not engage in illegal transactions such as virtual currency [trading]” or token issuing, alongside other banned payment outlets like pornography or online gambling. The new rule comes into effect at the end of the month, on May 31.
China has particularly stringent rules when it comes to cryptocurrency, with exchanges banned from offering services in the country, meaning WeChat may have succumbed to government pressure. Binance CEO Changpeng “CZ” Zhao said that it was “probably not [WeChat’s] own choice” in a tweet, suggesting that the new restrictions could create an opening for crypto companies to eat WeChat’s lunch on the payments side of its business.
WeChat is a dominant channel for over-the-counter (OTC) cryptocurrency transactions in China, according to founding partner of Primitive Ventures Dovey Wan, meaning the policy-change could strain the liquidity pool in the region.