Earlier this week, Binance announced that it was handling OTC trades for Bitcoin over WeChat’s payment rail as well as AliPay.
“No, You Can’t”
Our colleagues at The Block first reported on the situation.
AliPay told the publication:
“Alipay closely monitors over-the counter (OTC) transactions to identify irregular behavior and ensure compliance with relevant regulations. If any transactions are identified as being related to bitcoin or other virtual currencies, we immediately stop the relevant payment services.”
A Binance spokesperson also admitted that the company has not “technically” integrated with WeChat’s payment API. Instead, Binance is helping to facilitate the trades, without being able to guarantee that AliPay, WeChat, or any other service will honor transactions.
On Twitter, there was intrigue around the Binance news. Commentator and journalist Larry Cermak tweeted about the situation on the ground in Asia — where, he claims, trades facilitated over social media are the norm. Cermak even claimed that Asian exchanges routinely help pave the way for accounts to conduct trades, having dedicated “unblock” teams.
The real story of China and cryptocurrency pic.twitter.com/7uCtTgiDmU
— Mike Dudas (@mdudas) October 10, 2019
Chinese OTC Keeps It On The Low
To this, Binance CEO Changpeng Zhao urged that the Block publish “no more news like these” because “some things are better left unsaid.”
Trading cryptocurrency is illegal in China, where WeChat Pay and AliPay are massive, boasting hundreds of millions of users.
The reality is that virtually anything can be used to trade Bitcoin, including gift cards. Due to the asset nature of BTC, services are often traded with a value denominated in fiat.
WeChat and other services offer great peer-to-peer payment methods, but they’re still difficult for international users to effectively exploit.
As such, cryptocurrency can play a vital role in these networks.
For its part, WeChat has an incredibly advanced censorship algorithm, which picks up banned conversations, websites, content, and even pictures, and filters them out from people on the mainland.
Often enough, users not based in China also find their content cleansed of items deemed by China to be unsuitable for consumption.
Binance is legally based in Malta, but it started as a Chinese project. The company is currently working on a number of efforts, including expanding its fiat-to-crypto on-ramps and building a US footprint with a regulated exchange offering there.