WeChat Pay Will Start Terminating Accounts Caught Dealing with Crypto

by May 9, 2019

WeChat Pay, one of China’s most popular e-wallet providers, has just updated its payment policy to ban cryptocurrency transactions. The move was first noticed by founding partner of crypto investment firm Primitive, Dovey Wan in a tweet.

According to the tweet, merchants that serve any token issuance or fund raising of crypto trading activities will risk account termination. Since most over-the-counter transactions locally occur on WeChat, Dovey expressed concern that the move would impact liquidity to some extent.

The updated rules will come into force on the 31st of May, stopping merchants from using its platform to engage in “illegal transactions” like virtual currency.

The tweet contained a screenshot of the policy changes, which intimates that users who engage in cryptocurrency trading will have their accounts terminated.

China has long stood as a powerful region for the crypto space, but in recent years, its regulators have been looking to crack down on the nascent scene.

For one thing, China has long been one of the biggest contributors to Bitocin mining, thanks to the numbers of computer hardware specifically designed for mining hailing from the region.

Previously, mining falls under a regulatory grey area, but the National Development and Reform Commission (NDRC) said in April that it was seeking public opiion on a revised list of industries that it may encourage, restrict or eliminate. A revised draft of the list added cryptocurrency mining as an activity that should be phased out.

WeChat’s move to crack down on cryptocurrencies could be the marker  of increasing governmental pressure on the decentralised coins. The country generally keeps a tight leash on cashflow in and out of its borders, and cryptocurrency threatens to undermine capital controls. Of course, there’s also the concern that cryptocurrencies can be used to circumvent laws to buy goods and services against Chinese law.

CEO of Binance Changpeng Zhao (CZ) responded to Dovey’s tweets echoing these sentiments.

He also said that “this is a classic example of short term pain, long term gain”. To CZ, in the long term, similar types of restrictions on freedom will push people to use cryptocurrency.

He concluded that it’s not a bad thing.

Featured image via WeChat Pay