The rules will kick-in on May 31, and Wan has expressed concern over the impact of the restriction on local over-the-counter (OTC) crypto trading liquidity, as most of China’s current bitcoin buying takes place over the counter due to government restrictions.
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
Commenting on the matter, Binance CEO Changpeng “CZ” Zhao stated, “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.”
CZ also added that while WeChat has the best user interface for payments, the added restrictions will likely work against its user retention.
This news comes after WeChat blocked cryptocurrency and blockchain-related media outlets from its platform last August.
China’s National Development and Reform Commission (NDRC) also recently unveiled amendments to the guidance for the country’s industrial structure, with crypto mining categorized as an undesirable sector that should be eliminated immediately
More: Updated Policy
Image: Sinchen.Lin / Flickr
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.