In what could possibly mark the initial move by the government to regulate cryptocurrencies and connected transactions in India, the Corporate Affairs Ministry has produced it mandatory for corporations dealing with virtual currencies to disclose profit or loss incurred on crypto transactions and the quantity of cryptos they hold in their balance sheets. In a notification issued on Wednesday, the ministry announced the amendments produced in schedule III of the Companies Act with impact from April 1, 2021. According to the amendments, corporations, which have traded or invested in cryptos through a economic year, should disclose, “first, profit or loss on transactions involving cryptocurrency or virtual currency; second, amount of currency held as at the reporting date, and third, deposits or advances from any person for the purpose of trading or investing in cryptocurrency,” the notification study.
“As an industry player, we welcome this progressive step. It’s good to see that the has recognized companies’ investment in crypto as a legitimate asset class. We expect more companies to acquire and hold crypto-assets and diversify their portfolio,” Nischal Shetty, CEO, WazirX told TheSpuzz Online.
The mandate is also anticipated to increase institutional investment in cryptos. “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,” stated Shivam Thakral, CEO, BuyUcoin. Currently, as per market estimates, there are about $1.5 billion invested in cryptos by about 7-8 million investors in India.
The government had constituted an Inter-ministerial Committee (IMC) in November 2017 headed by former Secretary, Department of Economic Affairs Subhash Garg to study the problems connected to virtual currencies and propose precise action. The committee had in February 2019 recommended banning private cryptocurrencies like bitcoin and any activities connected to virtual currencies be criminalised. The Reserve Bank of India as properly, on various occasions like in 2013 and 2017 had cautioned customers against the probable economic, operational, legal, consumer protection, and safety-connected dangers in virtual currencies. In April 2018, it had practically banned cryptos till the Supreme Court lifted the ban.
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In a written reply to a query in the Rajya Sabha on Tuesday, Minister of State for Finance Ministry Anurag Singh Thakur had stated that the government will be taking a choice on the suggestions produced by the Inter-Ministerial Committee (IMC) on cryptocurrencies in India. Accordingly, a legislative proposal, if any, would be brought just before the Parliament. According to a bulletin of the Lok Sabha in January for the spending budget session, the government is quickly probably to introduce a Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 to ban all “private cryptocurrencies” in the nation such as bitcoin except “for certain exceptions to promote the underlying technology of cryptocurrency and its uses,” the legislation had study.
However, the most current amendment is anticipated to ease investors’ tension. “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,” stated Monark Modi, Founder and CEO, Bitex.
The ideas/suggestions about cryptocurrencies in this story are by the respective commentator. TheSpuzz Online does not bear any duty for their guidance. Please seek advice from your economic advisor just before dealing/investing in cryptocurrencies.