Chinese ICO Ban May End After Oct. 18 with Communist Congress Elections

OPINION

The 19th Communist party leadership elections are scheduled to take place in China on Oct. 18 this year. New elections spell change for most governments, and this is certainly true in China. The elections are not democratic, but are internal elections to the chief seats of government within the Communist Party.

This election is an ‘odd year’ (the last one was in 2012), meaning that it will likely contribute substantial changes to the governance of China. Most notably, the election will include the retiring of five of the seven current members of the Politburo, the main governing body of the Chinese government.

While Xi Jinping will likely retain his seat as General Secretary, the overall makeup of the government may well change dramatically. These changes could reflect a change in monetary policy, not unlike the change that happened in 2011 when the 17th convention sought to ban VIEs (variable interest entities allowing Chinese companies to trade on US markets). The ban was quickly overturned after the 18th election was complete.

ICO ban will end?

There’s no guarantee that a new government will reverse the ICO and exchange ban that has plagued crypto markets in recent weeks. Nevertheless, there may well be political motives to the ban that will make it unnecessary after the elections are complete, according to Forbes.

While it’s true that a decentralized currency could create havoc in the heavily centralized Chinese economic platform, the current size of the Bitcoin economy is so minuscule that any threat is perceived rather than real. Therefore, the ban may be more of a jockeying for seats and positions by current convention hopefuls, rather than a genuine financially motivated decision.

If this is the case, the ban will be purposeless post-election, and may well be ended. However, ICOs and exchanges may have already fled the country to other safer environments, so the damage may be too great to reverse.