BENGALURU : At a time when speculations are rife that the government would impose a blanket ban on virtual currencies, the industry is hopeful that India may rather regulate crypto assets. This comes after the Ministry of Corporate Affairs announced amendments in the Company Act (2013) seeking disclosures from companies dealing with such currencies. The new regulations will be effective from April 1,2021. Industry watchers say that the guidelines signal a positive shift, validating institutional investments in cryptocurrencies which will further boost investors’ confidence as well as help companies to move ahead in creation of crypto assets. Globally, too, the likes of Tesla CEO Elon Musk and Twitter Chief Jack Dorsey lent their support to digital currencies.
The Indian government’s fresh guidelines allows companies to disclose profits/ losses on any crypto transactions, the amount of holding as well as details of advances from any person for the purpose of investing/ trading in cryptocurrencies. The disclosures will have to be made by the companies in their balance sheets. India’s Internet and Mobile Association while welcoming the move said that it will bring more transparency within crypto trading.
“The move opens the door for all Indian companies to have crypto on their balance sheets. It is a good sign that India is moving towards more acceptance and awareness amongst the mainstream markets and regulators. This would help in shaping the market, eventually leading to its growth,” said Sohail Merchant, CEO of Pocketbits and a member of IAMAI’s Blockchain and Crypto Assets Council.
Earlier this week, RBI Governor, Shaktikanta Das also said that the central bank has flagged some concerns on the cryptocurrencies to the government. He, however, maintained that efforts are afoot to develop a digital currency model which will address the financial risks, legal challenges. Currently, there are about 10 million crypto investors in India with a combined assets of over $1 billion.
According to Sumit Gupta, CEO & co-founder, CoinDCX, the move will bring transparency and act as a comfort for Indian companies which are dealing in crypto-assets and were previously confused on how to put it in their books. “We have already implemented enhanced KYC requirements for institutions,” he added.