The Chinese-owned social networking and mobile payment platform app developed by Tencent, WeChat is introducing a new policy that prohibits its users from using certain services related to non-fungible tokens (NFTs) and cryptocurrencies on the platform.
According to the social networking platform, digital assets such as cryptocurrencies or NFTs are now considered illegal business on the platform via the new policy. Hence, the outlet will restrict or ban accounts that issue, trade, or finance such digital assets.
The new policy also imposes fines on accounts that provide transaction channels, advice, or cryptocurrency to Wechat users. Accounts that enable initial coin offerings (ICOs) and crypto derivative transactions will also be impacted.
According to the report, Wechat’s management is following guidelines provided by Chinese regulators earlier this year advising enterprises in the field to avoid the financial component of such digital assets.
Back in April this year, the Chinese Financial Institutions have already been asked not to use NFTs in securities, insurance, lending institutions, and precious metals.
Banks are also advised not to facilitate NFT-related trading activity. The measure appears to be tied to the Chinese government’s upcoming steps regarding digital assets. According to brokerage Guosheng Securities, China is poised to develop a centralized secondary trading platform for NFTs.
Speaking on the new development, Senior Analyst of research firm Trivium, Bao Linghao, said that to date there are no formal rules related to NFT trading. WeChat’s move is a preventive action to keep the company out of trouble.
In his words: “Tencent is acting preemptively to keep itself out of trouble,” he continued “Chinese regulators don’t like speculation of any kind, including NFTs.
Consequently, WeChat maintained that any users who violate the new policy will be asked to correct it within a certain deadline or restrict the account. Likewise, can permanently block the account in question. Stay connected with TechGenyz for more updates.