Facebook reverses its decision on crypto ad restrictions

Meta, ex-Facebook, on Wednesday announced its decision to reverse its long-standing policy that prevented most cryptocurrency companies from running ads on its services. The company’s new policy is huge for the crypto industry and will allow more retail investors to access cryptocurrencies than ever before.

Citing greater government oversight and a more mature market for the world of cryptocurrency, Meta says that it’ll soon expand the list of regulatory licenses it accepts from just three to a much larger pool of 27, opening the gates to many more companies and businesses to advertise on its platform.

“Over the years, the cryptocurrency landscape has matured and stabilized and experienced an increase in government regulation, which has helped to set clearer responsibilities and expectations for the industry,” a statement from the company reads. “This change will help make our policy more equitable and transparent and allow for a greater number of advertisers, including small businesses, to use our tools and grow their business.”

The company banned cryptocurrency ads in January 2018 but scaled back that ban slightly in May 2019. The ban had prevented start-ups in the cryptocurrency and blockchain fields from promoting their work and reaching potential customers on Facebook and Instagram.

Henry Love, a former employee on Facebook’s small business team, told CNBC the company’s new policy is huge for the crypto industry and will allow more retail investors to access cryptocurrencies than ever before.

“With more openness and transparency for what crypto companies can do, we will see more adoption for the cryptocurrency industry and the metaverse than ever before,” said Love, managing partner of Fundamental Labs, which has invested $500 million in the cryptocurrency industry since 2016. “This is a game-changer for mass adoption.”

Emad Hasan, another former Facebook employee, said the new policy will also be a boon for start-ups working on blockchain, which is the technology used to make cryptocurrencies work.

“These companies had been in a spot where they couldn’t advertise on Facebook. They couldn’t drive people to convert fiat currency into cryptocurrency,” said Hasan, CEO of Retina AI, a start-up that helps brands target high-value customers on social media. “This will enable the average day-to-day person to do this.”

Facebook has scaled back its own ambitions in cryptocurrency significantly over the last year. After outlining plans for a currency and a digital wallet in 2019, Facebook faced stiff backlash from lawmakers and regulators worldwide. The company finally released its digital wallet product, Novi, in October. As a result, the digital currency, now named Diem and is run by an independent association, remains unreleased to the public.