Ahead of the long-awaited Cabinet nod for the cryptocurrency bill, cryptocurrency exchanges are considering slowing down on advertising and shifting their focus towards education through advertisements.
An industry source told Moneycontrol, "There is a broad consensus among companies to go slow on advertisements or at least do it in a more responsible way, where the focus is more on education and marketing.”
In a meeting chaired by Prime Minister Narendra Modi on cryptocurrency with stakeholders on November 13, concerns were raised over non-transparent advertising that could mislead youth.
This was followed by a meeting between cryptocurrency industry representatives and the Parliamentary Standing Committee on Finance on November 15 where the issue of full-page crypto ads in national dailies was raised again.
According to a report in The Economic Times, crypto exchanges like CoinDCX, CoinSwitch Kuber, WazirX among others spent a total of Rs 50 crore in advertisement spends during the ICC T20 World Cup.
“The industry is of course not taking these concerns lightly. We will be addressing this one step at a time,” said Sathvik Vishwanath, Founder and CEO of Unocoin.
The industry is also looking forward to clear guidelines for advertisements that may follow after clarity on regulations.
Focus on education and transparency
"A number of people who usually invest the traditional way were inquisitive after seeing the crypto campaigns which was a solid advantage for the crypto players. But, the industry should have started creating more awareness and education first around the topic and then look at building the market," said communication strategy consultant Karthik Srinivasan.
In October, CoinSwitch Kuber onboarded actor Ranveer Singh as its brand ambassador, and CoinDCX roped in actor Ayushmann Khurrana. Exchanges are also tying up with influencers on social media platforms for ads.
After picking pace on advertising, the industry may now have to tread carefully on the messaging and disclaimers mentioned in these advertisements.
An industry source said, “The expectation from crypto exchanges will be that the advertising is transparent and doesn't make false promises. Ads need to be upfront in terms of risks associated and inform people that the sector is yet to be regulated.”
Impending crypto bill
This is a very crucial time for the industry as the Finance Ministry is planning to table the cryptocurrency bill in the winter session of the Parliament which will be held from November 29 till December 13. Moneycontrol had reported on November 15 that the government is currently working on the definition of cryptocurrencies, tax treatment from gains and also mulling on which body will regulate the sector.
While on one hand discussions and consultations are being held at the highest level among the Reserve Bank of India (RBI) and the Finance Ministry, the Parliamentary Standing Committee on Finance has sought answers from the industry on how the industry is operating currently and also on how India stands to benefit through cryptocurrencies.In an interview with CNBC-TV18, Jayanth Sinha who is the Chairman of the Parliamentary Standing Committee on Finance said that different cryptocurrencies will have to be regulated differently based on use cases.
“Crypto finance can serve as an asset, commodity or payment system. We have to appropriately bucket it into any one of these categories and after that, we can draw the right lines and then the taxation framework can be applied seamlessly,” Sinha said.
Meanwhile, RBI Governor Shaktikanta Das reiterated RBI’s stance on concerns around cryptocurrencies.Speaking at the eighth State Bank of India (SBI) Banking and Economics Conclave on November 16, Das said, “The number of Cryptocurrency accounts in India is exaggerated. There is a need for deeper discussions on cryptos and we are yet to see well-informed discussions on key concerns, some of which have been raised by RBI.”