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Facebook has announced that they are relaxing their advertising ban on companies promoting products and services relating to crypto. The move comes as the company is talking about its efforts to create a stablecoin to use within some of its apps.
“While we will still require people to apply to run ads promoting cryptocurrency, starting today, we will narrow this policy to no longer require pre-approval for ads related to blockchain technology, industry news, education or events related to cryptocurrency.”
Many in the crypto community argue that a Facebook digital currency would be in competition with the US dollar and other fiat currencies rather than Bitcoin. Meanwhile, others have stated that the company’s efforts to create its own digital currency could prompt loads of new users to enter crypto.
Spencer Bogart from Blockchain Capital posted that the project could see a huge influx of new users keen to explore truly decentralized digital assets:
— Bloomberg Crypto (@crypto) May 8, 2019
Bogart claims that this Facebook’s move is like being on the internet:
“So people can spin out and they can start owning bitcoin, they can start owning ether. Some percentage of the user base is likely to do so, and again I think that’s gonna be a dramatic catalyst.”
He also said that the news of Facebook’s plans has “lit a fire” under financial institutions that were considering working on crypto-like products and services. Some of them are allegedly alrready been inspired to take that kind of step themselves, following the social network’s lead.
An example provided by Bogart is TD Ameritrade’s recent announcement to start offering exposure to crypto assets.
Mati Greenspan, senior market analyst at eToro is however skeptical that Facebook news has anything to do with it.
Greenspan believes that it’s more likely that the market is up partly because of sentiment’s “[general] bullishness” but also because of the news surrounding the Tether (USDT) stablecoin and Bitfinex.
Ads Including ICO – Still Banned
However, from the company they said:
“People who want to promote cryptocurrency and closely related products, such as cryptocurrency exchanges and mining software and hardware, will still have to go through a review process. This process will continue to take into account licences they have obtained, whether they are traded on a public stock exchange (or are a subsidiary of a public company) and other relevant public background on their business.
An ad that directs to a landing page that features a restricted product, such as a cryptocurrency exchange, will still require prior approval. Or, if the landing page includes a prohibited product, such as an initial coin offering (ICO), we will reject it.”
Last week it was reported that Facebook is secretly working on its cryptocurrency-based payments system.
Dubbed as the Project Libra, the report suggests that Facebook is already in talks with payment processing giants Mastercard and Visa. The Facebook Coin is likely to be a stablecoin, pegged by the U.S. Dollar, and underpinned by the blockchain technology.
Tara Annison, Technical Product Manager of the PR9 Network, an institutional crypto trading and settlement platform, said that it might also represent a crucial watershed moment in how industry players are perceived.
“It’s not just start-ups and crypto-based businesses who are interested in blockchain technology and the power of cryptocurrency, but established businesses such as Facebook too.”
Will the Mighty Google Follow Again?
However, it is important to remember why this company– which has 2.38 billion active monthly users as of March 31, 2019 – put a ban in the first place. Back in 2017, there were plenty of scams as money poured into the crypto sector. ICOs with improvised WordPress websites and unverifiable, and often faked, teams were able to raise hundreds of millions from unsuspecting investors.
To combat the sudden explosion of suspicious advertisements on the platform, in January of 2018, Facebook announced a new policy which outright banned cryptocurrency ads, saying that these ads were frequently “misleading or deceptive”.
Facebook was not the only one and it was Google who followed banning cryptocurrency ads in March of 2018. In June of 2018, Facebook loosened its policy to allow for crypto-related ads from select pre-approved advertisers and Google followed in September. Will the Google follow again, or maybe make the step towards – it’s for us to see.