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Analysis | RBI’s concerns reflect in latest ASCI curbs on crypto advertisements

The banking regulator has been cautioning investors about the unregulated cryptomarket. The ASCI curbs follows a recent call from a top central bank official to ban cryptocurrencies in India.

February 23, 2022 / 07:54 PM IST

On February 23, the Advertising Standards Council of India (ASCI) released a set of guidelines for advertising cryptocurrencies and non-fungible tokens (NFT). The guidelines mandated that all advertisements for virtual digital assets should say crypto products and NFTs are unregulated and can be highly risky.

“There may be no regulatory recourse for any loss from such transactions," said the ASCI guideline. Crypto, NFT ads should carry these guidelines prominently visible to the average consumer. ASCI said in a statement that these guidelines have been formed after extensive consultations with stakeholders including the government and the industry.

The ASCI guidelines are not entirely unexpected. According to top bankers and central bank insiders, the unchecked spread of crypto-related advertisements had caused concerns to the regulator as more investors were drawn into these high-risk, unregulated instruments without understanding the associated risks. The RBI is equally worried about the macroeconomic risks arising from the crypto transactions.

Approximately 10 days ago, a top Reserve Bank of India (RBI) official publicly called for a ban on cryptocurrencies. Launching a strong attack on cryptocurrency, Reserve Bank of India (RBI) Deputy Governor T Rabi Sankar on February 14 said banning cryptocurrency is "perhaps the most advisable choice open to India".