What happened: WeChat pay’s ban on crypto trading activities may not be a bad thing in the long run, according to Zhao Changpeng or CZ, CEO of crypto exchange Binance.
“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,” Zhang wrote in a Twitter post, adding that the new restriction may create new opportunities for other crypto companies. On Tuesday, WeChat updated its payment policy restricting merchants from participating in illegal transactions including crypto trading and token fundraising. The policy will come into effect on May 31.
Why it’s important: WeChat Pay and Alipay have become popular among crypto traders for payment processing. While the ban can be viewed as a positive change in the long term, some worry that it may have a significant impact on liquidity in the region. This is not the first time WeChat has moved against cryptocurrency trading. Earlier this year, WeChat Pay and Alipay reportedly asked cryptocurrency exchange Huobi to remove their payment methods from its OTC trading desk.