Visa India and South Asia head TR Ramachandran, who would be relocating to Singapore next year to assume a regional role, on Thursday sounded a note of caution on crypto advertisements. Speaking at a virtual event organised by fintech company Razorpay, Ramachandran said that by advertising high returns, the crypto industry is killing the goose that lays the golden egg.
“Cryptos have a finite supply and infinite demand, (and) so prices keep going up and down. I conceptually don’t have a disagreement (to that) but I do have a point of view on the way it is marketed particularly in the last six-nine months. My worry is that average 19-year-old student or an average 35-year-old housewife or an average 40-year-old government clerk doesn’t understand what he/she is getting into,” said Ramachandran.
“As long there is fair disclosure, there is no problem. It should be democratised and anybody should be free to invest but if you say that I assure 200 per cent returns in six months and you do this advertisement, I think in many ways, the industry is killing the goose that lays the golden egg,” he added.
Crypto ads had popped up on TV screens and newspapers earlier this year and also during recent sporting events including the Indian Premier League and ICC T20 World Cup. For instance, crypto exchange Bitbns had launched an ad that its Bitcoin fixed deposit gives four-time higher returns than a bank deposit. The ad was later pulled down. CoinDCX, CoinSwitch Kuber, and others had also launched their commercials.
Ramachandran comments came amid the likely introduction of the Cryptocurrency and Regulation of Official Digital Currency Bill 2021, in the ongoing winter session of Parliament. The bill had sought to “prohibit all private cryptocurrencies”, though it will allow “certain exceptions to promote the underlying technology of cryptocurrency and its uses,” according to the list of legislative business for the Lok Sabha, published on November 23. Finance Minister Nirmala Sitharaman had last week said that the government will introduce the bill after Cabinet’s approval.
“There is no solution currently to close crypto ads but certainly to caution people around the risk involved, the government is taking steps via SEBI and RBI,” Sitharaman had said in Parliament in response to a question on the government’s plans to shut down crypto ads.
The minister had added that the guidelines of the Advertising Standards Council of India were being studied and regulations that they had were being looked into so that, if necessary, the government can take some kind of decision in order to “handle” this. The question of shutting crypto ads was raised by senior BJP leader and Rajya Sabha MP Sushil Kumar Modi who said that “during the recent cricket world cup, over Rs 50 crore was spent by crypto exchanges in ads that ran without any disclaimer. These ads are misleading and can lead to heavy losses.”
Ramachandran, however, called for regulating cryptos instead of banning them. “In Web 3.0, decentralised finance and distributed ledger technology is inevitable. Crypto is one manifestation of that…There will be some regulation, I don’t think we can ban it for too much longer. Regulating it is better than banning it.”
The US-headquartered Visa on Wednesday had launched its crypto consulting services – Global Crypto Advisory Practice for its clients and partners such as financial institutions including banks to help them “evaluate the crypto opportunity, develop concrete strategies, and pilot new user experiences and innovations like crypto rewards programs and central bank digital currency (CBDC)-integrated consumer wallets,” Visa had said in a statement. Visa had reportedly recorded over $1 billion spent on crypto-linked Visa cards in the first half of 2021.
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