NEO May Become Gateway to ICOs in China
China is poised to hold talks on ICOs on October 18th, during the next National Congress of the Communist Party. There is a possibility that NEO becomes the key to renewing ICO-fueled projects in China.
NEO may be the key to renewed ICO efforts in China, reported the technological blog The RMB Theory in an analytical piece. The Chinese blockchain sector may see new guidelines, statements or perhaps restrictions as the Chinese Communist Party convenes for its annual Congress on October 18th.
In the past weeks, the cryptocurrency market has shown it can adapt to the ban of trading in China. But the market for ICOs still has no clarity on how projects in China would be handled.
According to the analysis of The RMB Theory, China may demand a registration for ICOs similar to the registration of foreign businesses operating in China. And a lot of foreign businesses rely on a local partner. In the case of ICOs, NEO may become the go-to partner for foreign ICO projects targeting Chinese buyers.
NEO was one of the hot platforms commanding a high market price. But in the past weeks, the price of NEO slumped from a temporary peak below $40 toward $27, losing 12% in the past week. Investors are still hoping on a recovery for the most high-profile Chinese blockchain project.
"On the 18th of October, the National Congress of the Communist Party of China will take place in Beijing. This congress might give a more conclusive announcement on the future of block-chain technology in China, a joint venture type of regulation is very likely,"
But others expect that the Congress will change nothing, and instead Bitcoin will be even more restricted in China.
"I see the crackdown on bitcoin as part of this larger multi-agency program to reduce financial sector risk, which will unfold over months and probably years,"
said Jim Stent, author of "China's Banking Transformation" for CNBC.com.
Stent believes the ban on exchanges and ICOs was not a temporary posture ahead of the Party Congress.
China moved in at the beginning of September to ban the trading of cryptocurrencies for cash, and later to limit the raising of funds through ICOs or token sales. This caused Bitcoin to tumble to a low of $2,950, but as trading picked up in Japan, the official price set new records, easily vaulting $5,800.
Russia recently announced similar restrictions on cryptocurrencies, citing price volatility and a risk for the ordinary buyer. Both China and Russia are paradoxical markets, where mining and the technological side of cryptocurrencies spread like wildfire, but the financial side was extremely worrisome to the authoritarian style of the governments.
"Prices could head below $5000 again this week, if the conservative side of the CPC gets the upper hand of the convention this week. While it’s anyone’s guess which way things will turn, one thing is clear: Bitcoin traders are in for a rough ride," said economist Panos Mourdoukoutas.
Currently, China can no longer affect the market as trading volumes have dwindled to almost zero. But the general bad news may cause at least a temporary drop in the near-record prices of Bitcoin.