26/03/21

INDIA: Government makes first move to regulate Bitcoin, asks companies to disclose all cryptocurrency dealings.

As published on indiatoday.in, Friday 26 March, 2021.

Indian government has made its first move to regulate bitcoin and other cryptocurrency by making it mandatory for all companies in the country to disclose their dealings in virtual currency in their balance sheets. The directive was passed by the ministry of corporate affairs (MCA) on Thursday. The step is likely to change cryptocurrency dealings in India and is expected to bring more transparency between investors and government.

As per the directives, the companies will have to disclose profit or loss on transactions involving cryptocurrency or virtual currency and the amount of holding. They will also have to share details of deposits or advances from any person for the purpose of trading or investing in cryptocurrency or virtual currency.

The amendments have been made to Schedule III of the Companies Act, 2013 and will be applicable from the upcoming financial year, MCA said in a notification. The decision comes amid government proposals to regulate cryptocurrency in India or impose ban on certain transactions.

“This a major step towards regulating the crypto assets in India and will bring in lot of transparency in reporting/filing of crypto investments. The move will boost institutional adoption of crypto assets in India and will take Indian crypto industry to the next phase of growth,” Shivam Thakral, CEO, BuyUcoin said.

Over 7 million investors are believed to have put more than $1 billion in cryptocurrencies in India. This makes it really difficult for the government to impose a blanket ban but more measures that give RBI better control, are expected.

“With this move, the government has ensured, that in a global scenario wherein giants like Tesla, Paypal are actively participating in the crypto domain, the Indian companies are not falling back. Also, further to this, all the trading volumes by Indian companies go into accounts, which are huge," said Kumar Gaurav- Founder and CEO Cashaa, a cryptocurrency exchange.

The decision comes days after Tesla chief Elon Musk announced that the car manufacturer will now accept Bitcoin as mode of payment. "You can now buy a Tesla with Bitcoin," Musk said in a tweet. This makes Tesla the first major automaker to start accepting payments in bitcoin in exchange for its products.

The Bitcoin prices shot up once again soon after Tesla’s announcement.