China, for the most part, has been quite skeptical about the cryptocurrency phenomenon, and although crypto is not banned in the country, it is heavily regulated. The country’s stance on the new age tech comes from the general distrust around it. China’s popular messaging app and payment service boasting 1.098 billion users (up till December 2018), WeChat, has recently revised its payment policy wherein they have imposed a ban on crypto transactions. The news of the change surfaced on Twitter on 7 May via crypto investment firm Primitive’s Dovey Wan.
What does the Change Mean for Cryptocurrencies?
The post from Wan included a picture of the revised rules which warned users against crypto trading unless they wish to get their WeChat accounts deleted. Given the platform’s popularity in the country, having recorded daily transaction volumes of more than a billion, Wan fears the change would affect crypto liquidity.
Currently, WeChat serves as a hassle-free payment alternative that can be easily used to pay for everyday items at nearby stores and the exclusion of crypto from its payment service would indeed affect its adoption. The new rules will come into effect from 31 May.
However, on the other hand, the move is being seen by many crypto experts, including Binance CEO Changpeng Zhao, as a restriction that would eventually incite people’s curiosity in cryptocurrencies. Explaining this further Zhao stated:
“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.”
In other words, experts see a silver lining behind this restrictive cloud and believe that it is “a classic example of short term pain, long term gain.” Also, Zhao believes WeChat, which is used in China by people of all ages and is a preferred mode of payment, could have been an unrivaled app if it did not have such constricting regulations.
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