Some prominent anti-crypto governments with these harsh regulations include the United Kingdom, Singapore, China, and even Spain. The primary reason for this clampdown on crypto adverts has been revealed to be a lack of understanding of what crypto is for most of its users. The UK Treasure reported that many crypto users have no idea or more profound understanding of the digital assets they are accumulating. He added that many are just buying in on the assets due to the fear of missing out.
Many crypto supporters believe these recent restrictions on advertisements might negatively impact the sector, but Binance CEO, Changpeng Zhao, alias CZ, does not.
In a recent interview organized by CNBC, Binance Boss, CZ, said he does not believe the prohibition of crypto advertising by different global institutions will reduce or limit the growing demand for digital assets. The billionaire explained that demand and user growth within the cryptocurrency industry had had little or no help from physical and online advertising. Many users have bought into crypto projects based on word of mouth from trusted acquaintances and marketing teams.
Over the years, crypto adoption has been on the rise, even when popular advertising services like Facebook and Google refused to support or allow crypto adverts. It wasn’t until recent years that these primary advertising services became open to these ads. This alone shows clearly that physical or online ads have no significant role to play in generating demand or boosting the adoption of digital currencies across the globe.
Looking at the short-term impact of these restrictions, it is possible that the clampdown on ads would slow the industry’s growth. Nonetheless, CZ argued that the demand for digital assets was strong enough to break out of the hold these restrictions might place on its path. He maintained his belief that the lack of crypto promotions on social media platforms will have little impact on demand and the industry.
Word-of-mouth promotions are the most critical driver of crypto demand. This strategy is portrayed when one person tells another about the usefulness and effectiveness of digital assets built on blockchains. Through this strategy, millions of individuals around the world have been drawn into the decentralized world of cryptocurrencies and various blockchain-hosted assets.
CNBC’s interactive session came at a period where various countries are taking a slew of harsh actions to curb the crypto industry’s growth. This clampdown on ads has been followed by different reactions from crypto and non-crypto users.
Over the past few weeks, the UK’s advertising regulator, the Advertising Standards Authority, has taken down at least two adverts released by Crypto.com, one of the leading crypto trading platforms. The agency is tirelessly monitoring the space to crackdown on other misleading ads.
Some weeks ago, Singapore published new guidelines and rules for resident crypto companies. The new policies prevent these companies from advertising crypto assets or projects in public spaces. The government, through its monetary authority, disclosed that crypto ATMs are not allowed within the country. To follow the new directives, many crypto service providers have closed down their crypto ATMs around the country. At the same time, the Spanish government released a memo asking all crypto companies to include disclaimers after all advertisements stating that investors have a potential risk of losing their money or assets. The country is in the process of putting together new guidelines to regulate crypto-advertisements.
The Indian legislature also proposes a crypto bill to ban crypto exchanges from making advertisements. The bill has yet to be discussed or voted on.
Resolving this issue
According to these governments, these crypto advertisements are more or less a source of big headaches. As we advance, crypto firms have to provide accurate content in all ads, stating the risks involved in all forms of crypto investments without highlighting only the big returns.
The governments’ efforts to crackdown on crypto ads would be better if only the misleading ads were screened and removed from public spaces. Thankfully, investors rely more on word of mouth before making any major crypto investments, so demand will most likely continue rising, or worst-case scenario, it will remain the same.