ASCI regulation on virtual digital assets: How effective it is for VDA industry?

ASCI enters next phase of evolution, unveils new brand identity

The Advertising Standards Council of India (ASCI) has issued new guidelines for virtual digital assets (VDAs). In a recent announcement, the council has underlined the fresh instructions on the marketing and promotional activity of this industry. The suggestion says to add a prominent disclaimer on the ads and promotions of VDA products, often referred to as crypto and NFTs. The disclaimer should go like this: “Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.” This is to bring out the notice to the average consumer who might get confused with the aggressive advertisements that have surged over the past few months.

Speaking about the latest guidelines, Subhash Kamath, Chairman of ASCI, said“We had several rounds of discussion with the government, finance sector regulators, and industry stakeholders before framing these guidelines. Advertising of virtual digital assets and services needs specific guidance, considering that this is a new and as yet an emerging way of investing. Hence, there is a need to make consumers aware of the risks and ask them to proceed with caution”.

The guidelines will be applicable to each VDA product-related ad and promotion that is set to release on or after 1st April 2022. The media owners or advertisers have also been advised not to use earlier ads in the public domain without complying with the guidelines post 15th April 2022. How will all of these help the industry? What does it mean to the VDA industry?

Rikki Agarwal Co-Founder and COO of Blink DigitalReacting to the announcement, Rikki Agarwal, Co-Founder & COO, Blink Digital said, “The new guidelines by ASCI will certainly have an impact on brand engagements and ad spending going forward. We could also see an impact on how private crypto players plan their ad spendings during festive seasons, cricket tournaments, and on influencers and celebrities. In order to compete with the possible launch of the government’s digital currency, brands might consider newer avenues to interact with the consumers. Though the move will definitely help in education and creating awareness amongst the consumers, we will have to wait and watch on how brands relook at their strategy and plan their ad spends.”

This step from ASCI has received a big thumbs up from the VDA industry. As the industry itself believes that the heavy popularity of crypto and NFTs among mass has driven people to invest and engage with virtual digital assets. Therefore, the guidance is something that was well needed for the benefit of users. “Cryptocurrency has brought a major shift in the Virtual Digital Assets field, presenting lucrative investment opportunities for the investors,” said Raghav Gupta, MD, India, and APAC, Coursera.

Reacting to the topic, Keyur Patel, Co-Founder & Chairman, GuardianLink and Co-Founder, said, “Since digital penetration has increased multi-folds, there is a lot that can be explored with NFTs as it is becoming the new way of engagement between the artists and their fans. Furthermore, given the nature of the NFT universe which encapsulates segments like art, music, culture, etc. there has been a surge in artists across who have curated their own special NFTs, as a new medium of engaging with their audience. “

As we pace through the dynamics of technology and innovation, the fast-growing NFT trend will surely take precedence. While in India, we are still at the stage of “early adopters” of the growing NFT craze, we will surely witness a peak market growth for NFTs across all sectors in the years to come. With much hype and communities accepting the new normal, the Metaverse and Web3.0 curve will gain massive adoption targeting audiences across age groups, especially the GenZs, Keyur adds.

Ashish Singhal, Founder & CEO, CoinSwitchThe ASCI guidelines are a step in the right direction to standardize advertisements within the VDA space. We will continue to work together with ASCI and other stakeholders to refine them further. Says Ashish Singhal, Founder, and CEO, CoinSwitch.

Charles Tan, Head of Marketing at Coinstore reacts to the subject and said, “The disclaimer should communicate the risks associated with the digital assets so that investors can make an informed decision.” We strongly believe that advertising for crypto-related products and services should be aimed at protecting the interest of investors. An advertisement, by its nature, is very alluring and we should adopt global guidelines for promoting crypto assets on various advertising mediums. The crypto industry can generate massive advertising revenues and create larger employment opportunities across the ad industry. Charles further adds.

Harikrishnan Pillai, CEO & co-founder,TheSmallBigIdeaHarikrishnan Pillai, CEO, and co-founder, TheSmallBigIdea, “The fact that now it has regulations around it, tantamounts to a certain degree of acceptance and provides a positive roadmap to the future. The space is actually very unclear globally. And these regulations can actually protect the interest of both businesses and consumers. All investment-related products have been carrying disclaimers for a long time. The category should consider this as being treated as equals with other asset classes. We will have to ensure that the policy, in its current form, is not seen as etched in stone. It has to constantly evolve in consultation with various stakeholders to ensure that companies, consumers and the economy gets to make the best of this opportunity.”

Clear advertising guidelines from ASCI are actually a great move. “The clarity on advertisement guidelines will encourage crypto service providers to create annual media plans which will boost the revenues for the advertising industry. The advertising guidelines are based on our current understanding of the crypto ecosystem and are expected to evolve as the industry enters a more mature phase.” Says Shivam Thakral, CEO of Buyucoin, a homegrown cryptocurrency exchange.

The VDA industry is supportive of all the efforts made towards the interest of investor protection. Therefore, the industry is welcoming the regulations on a happy note. However, we are yet to see how this evolves with time.

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