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Is The World Ready To Open Its Doors To Cryptocurrency Advertising?
CEO and Co-Founder of SmartyAds Inc, seeing the bright future of ad tech in a transparent, fair and unbiased AI-driven environment.
This year, after Tesla made a $1.5 billion Bitcoin investment, for the first time in history, the cryptocurrency market cap reached $1.4 trillion, officially surpassing Google stock. Although the cryptocurrency sector has grown over the last couple of years, regulations and bans bestowed on the promotion of cryptocurrency still make crypto advertising challenging.
Sure, changes from Google that come into effect on August 3 will loosen up restrictions, enabling advertising of cryptocurrency wallets and exchanges. Still, we know that regulations for crypto advertising are not equal across countries. Is the world finally edging toward embracing cryptocurrency, or are barriers still strong?
Crypto Ad Bans And Restrictions: A Brief Recap
Up to 2018, advertising of crypto projects was officially allowed on most advertising platforms. However, in March 2018, Google, Facebook and Twitter banned such ads. After this, no advertisers, including legal companies, could advertise crypto-related projects or offer to buy tokens under an ICO. Facebook, in turn, labeled crypto products as misleading because many were fraudulent. A bit later, in September 2018, Facebook and Google partially lifted the ban, allowing advertising of cryptocurrencies and related projects from pre-approved advertisers in the U.S and Japan. In 2021, Google again loosened up restrictions for crypto advertising.
The arrival of large investors, like Tesla and Square, that bought million's worth of bitcoins this year, apparently made the advertising world reassess its approach to crypto projects. This year, the oldest bank in the U.S., BNY Mellon, will also start working with cryptocurrencies, offering to store, transfer and issue cryptocurrencies on behalf of its asset management clients. Mastercard also plans to allow cryptocurrency transactions in 2021. Finally, Visa, in cooperation with the cryptocurrency startup BlockFi, announced the release of a credit card that will offer cashback in bitcoins in the United States.
Different Regulations Set Different Game Rules
Some countries — like China, Russia and Colombia — have banned Bitcoin and cryptocurrencies completely, which spans everything including use, investments and promotion. In China specifically, where the crypto hype changed to crypto fear, the government has implemented various restrictions, making crypto-related advertising more challenging.
While Japan has always been more friendly toward cryptocurrencies, advertising crypto on certain social media platforms and messengers is prohibited here as well. In Japan, like in many other countries, the crypto industry is currently a self-regulatory body. As a representative of Yahoo Japan explained, search engines have to continually review the policies in relation to the ever-changing crypto regulation climate.
The U.S. has a rather positive outlook on cryptocurrencies, employing the Department of Treasury, Securities and Exchange Commission (SEC), Federal Trade Commission (FTC), Internal Revenue Service (IRS) and other entities into the industry’s regulation. At the same time, even the very definition of cryptocurrency varies from entity to entity, let alone their stances and politics regarding the application and advertising.
When it comes to the EU, there wasn’t a single regulation for the industry until January 10, 2020. However, recently the national anti-money laundering Directive was established for EU countries, putting a lot of companies in new conditions where they have to register with financial authorities and report to Financial Intelligence Units.
How Global Regulations Impact Crypto Advertising
Right now, in the majority of countries, advertising is not governed in conjunction with financial authorities. Regulation entities across countries also do not rush to establish solid restrictions regarding crypto advertising while the market is constantly changing and the possible benefits of cryptocurrencies are still being debated. Thus, it is impossible to predict exactly how crypto advertising will be regulated, especially on the level of every platform. One tech giant may impose tough restrictions, while another may allow advertising of crypto but with clear rules and requirements.
As we've seen over the past few years, Google, Facebook, Snapchat and other big ad platforms have embraced various levels of crypto advertising restrictions. The good news is that restrictions are currently loosening. Apart from that, crypto advertisers in this niche can still rely on alternative platforms and sources of traffic, alleviating the possible risks of being banned or blacklisted.
If the authorities in a particular country develop consistent guidelines and establish an official status of crypto products, I believe the platforms will be more likely to loosen up the bans and restrictions regarding advertising. According to Metro, "Christie Dennehy-Neil at the Internet Advertising Bureau, a British trade body, said large online platforms often introduce policies that take 'a judgment more broadly than advertising' to protect their reputation."
In the future, each country may develop industry-specific rules for advertising crypto products because without such standards and regulations, advertising service providers have to act according to their own hunches.
Where Do We Go From Here?
In spite of the increasing global adoption among businesses and investors, cryptocurrencies and products still appear nascent in terms of regulation — both in the U.S. and the rest of the world. The positive trend at this point is that some countries already transpose crypto advertising regulation into their laws, which will help ad tech providers that have so far been left to their own discretion. Creating long-term strategies for promoting crypto projects is challenging. Nevertheless, the bans are gradually declining so the marketers can monitor changes in the rules while also advertising on niche-specific platforms and embracing alternative sources of traffic.
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CEO and Co-Founder of SmartyAds Inc, seeing the bright future of ad tech in a transparent, fair and unbiased AI-driven environment. Read Ivan Guzenko's full executive
CEO and Co-Founder of SmartyAds Inc, seeing the bright future of ad tech in a transparent, fair and unbiased AI-driven environment. Read Ivan Guzenko's full executive profile here.