By CCN: Always the optimist, Binance CEO Changpeng “CZ” Zhao sees a silver lining in the wake of WeChat’s recent ban on crypto trading activities. According to a tweet today by Dovey Wan, founding partner of Primitive Ventures, the Chinese social media company released an updated payment policy which states that it will terminate merchant accounts that participate in cryptocurrency transactions.
In her tweet, Wan argues that most of China’s over-the-counter (OTC) cryptocurrency trades occur on WeChat. So, the ban could have a significant effect on the local market
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 Binance (@cz_binance) May 7, 2019
WeChat’s Fight Against Cryptocurrency
This ban isn’t the first time that WeChat has taken action against cryptocurrency transactions. Last August, WeChat Pay began restricting users from transacting cryptocurrency-related funds on the platform. Both moves are in line with China’s continuous crackdown on cryptocurrency and associated activities.
Just last month, the Chinese government released a report describing plans to put an end to bitcoin mining in the country.
CZ’s Silver Lining
Although the ban will obviously have some negative short-term implications on China‘s crypto market, CZ applauds the move as a positive for the industry. He explains,
“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.”
With WeChat and other payment apps continuing to expand restrictions and impose bans, he assumes more people will flock to cryptocurrency in response.
Is CZ Correct, Though?
More people aren’t going to begin using cryptocurrency because WeChat banned it on its platform. Although CZ doesn’t provide too much of an explanation, it seems as if he’s comparing this ban to other types of censorship. When Dave Rubin left Patreon due to censorship disagreements, he turned to cryptocurrency as a censorship-free funding alternative. The same reasoning should hold for WeChat, right?
Wrong. The ban only affects merchants who are working or plan to work with cryptocurrency. Those without cryptocurrency won’t feel a sudden urge to buy some because the ban doesn’t affect their life. Contrary to what CZ says, WeChat has become a major roadblock for the more than one billion people who could potentially be more involved with cryptocurrency.
Any restriction of freedom is a bad thing – whether or not it helps the crypto cause. We shouldn’t be rooting for adverse events to push adoption forward. Even though CZ’s heart is in the right place, his views on the WeChat ban are greatly misplaced.