The Indian government has recently taken a step that could well be seen as its very first move to regulate cryptocurrency transactions in the country.
India’s Ministry of Corporate Affairs has recently amended the Schedule III of the Companies Act 2013, mandating companies to reveal their cryptocurrency holdings and gains as part of their annual financial reports.
The amendment notice, which is set to take effect starting April 1, 2021, demands that companies dealing with cryptocurrencies make three disclosures in their financial reports for the fiscal year.
First, they are to disclose all profits and losses incurred from crypto transactions, second, their current cryptocurrency holding at the time of reporting their finances, and third, the number of crypto deposits received from any person either for trading or investing in the digital currencies.
A Step In The Right Direction
India has not always been a crypto-friendly country. Its central bank, The Reserve Bank of India (RBI) had cautioned citizens of the risks associated with trading cryptocurrencies.
The RBI was so cynical of cryptocurrencies that it ultimately banned them in the country earlier in 2018. However, after several legal battles, the Supreme Court lifted the ban in March 2020.
Although the country’s authorities are still not in full support of virtual currencies, with rumors of another proposed crypto ban, the mandate is expected to ease investors’ tension and boost crypto investments in the country.
Speaking on this, Shivam Thakral, the CEO of BuyUcoin said,
“This a major step towards regulating the crypto assets in India and will bring in a lot of transparency in reporting/filing of crypto investments. The move will boost institutional adoption of crypto assets in India and will take the Indian crypto industry to the next phase of growth.”
The founder and CEO of Bitex, Monark Modi added,
“In light of the recent speculation around banning, allowing cryptocurrencies to be a part of accounting practices will definitely put investors at ease as they no longer have to be worried regarding taxation. This is a definite endorsement and it is good to see that India is not falling behind the global cryptocurrency race.”
This recent development could potentially pave the way for crypto businesses and investors to receive the regulatory clarity they seek.
