WeChat, China’s social media giant has banned Bitcoin and cryptocurrency payment channels in a newly updated service policy document. The news will come as a blow to over-the-counter (OTC) cryptocurrency traders and brokers who have relied on the service for their business.
The WeChat ban is the latest effort by Beijing to ban cryptocurrency trading in its entirety within the country. Meanwhile, the cryptocurrency market is currently enjoying a day of positive price growth with the majority of the top-100 coins posting 24-hour gains.
WeChat Bans Bitcoin
In a policy update published on Tuesday (May 7, 2019), the Chinese social media behemoth announced the ban on cryptocurrency payment channels. Merchants can no longer publicize any token issuance or even Bitcoin and cryptocurrency trading activities.
Urgh, Wechat just updated its payment policy .. merchant can’t serve any token issuance/fund raising or crypto trading activities, otherwise account will be terminated
Given most OTC transactions are happening in wechat, this may impact local liquidity to quite some extent pic.twitter.com/TdNIO6cggS
— Dovey Wan (@DoveyWan) May 7, 2019
WeChat users who fail to comply with the directive will have their accounts terminated. According to the announcement, the policy change comes into effect at the end of May 2019.
This development isn’t the first anti-Bitcoin action taken by the Tencent-owned social media platform. Back in August 2018, the company began delisting users for providing news and updates about the latest happenings in the cryptocurrency and blockchain technology industry.
The censorship drive saw the WeChat accounts of popular news platforms like Caixin, Huobi Zixun, and Caijing to mention a few taken down from the platform. In its defense, WeChat did say some of the accounts were in violation of the country’s instant-messaging services laws.
More Liquidity Troubles for Cryptocurrency in China
Tweeting about the news, Dovey Wan, founder at Primitive and a noted trusted source for cryptocurrency news out of China decried the negative impact the move would have on Bitcoin OTC liquidity in the country.
Since the blanket ban on cryptocurrency trading by Chinese authorities in 2017, traders have been forced to depend on OTC platforms. These platforms utilize WeChat which has over one billion subscribers as a channel of communication.
Reacting to the news, Binance CEO, Changpeng Zhao declared that the effects would only be temporary and that the market will come up with an alternative. Commenting further, Zhao said such restrictions usually forced more people into adopting cryptocurrency.
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
The Binance boss also teased the possibility that the decision from WeChat might have been coerced. Beijing has consistently made efforts to stifle all forms of cryptocurrency-related activities and have a history of censoring social media platforms.
China Leaving No Stone Unturned in Anti-Crypto Stance
The WeChat announcement is one of the many ramifications of China’s anti-Bitcoin stance. Back in September 2017, regulators banned ICOs before prohibiting cryptocurrency trading.
Exchange platforms based on the mainland has to move to friendlier jurisdictions as the government continued its clampdown. Several platforms initially moved to Japan making the country to become the de-facto trading hub in the Asian cryptocurrency theater.
Chinese authorities didn’t stop at banning local cryptocurrency exchanges. Back in August 2018, Blockonomi reported that regulators had blocked access to 120 foreign cryptocurrency exchange platforms.
In April 2019, reports emerged that Chinese authorities were looking to ban Bitcoin mining. As reported by Blockonomi, the National Development and Reform Commission (NDRC) included cryptocurrency mining in a list of activities that should be eliminated from the country.
However, at the time, several commentators like Dovey Wan maintained that the news didn’t spell the death knell for Bitcoin mining in the country. According to Wan, the NDRC recommendation didn’t equate to immediate government action on the matter.
Despite clamping down on Bitcoin and cryptocurrencies in general, the Chinese government has consistently expressed a favorable disposition to blockchain technology. Several provinces and government agencies in the country have developed blockchain-based solutions.
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