- The Indian government has finally made it mandatory for all firms in the nation to disclose their holdings in virtual assets
- Touted as a significant move, it may be the first step towards ensuring common regulatory protocols for handling cryptos
- All firms are expected to adhere to the new directive within the next financial year
In a moment of historic significance, the Indian government has ordered all companies operating on its soil to disclose profits, losses, and current holdings of digital cryptographic assets and also share details regarding any transaction with any entity on the grounds of investing in cryptos. This move has the potential to finally eliminate the current “legal void” surrounding cryptos eventually leading to better regulations and greater protection for investors.
Move to ensure greater transparency
Ever since the RBI had issued a notification in 2019 to all firms in the country to sever ties to all entities operating with cryptocurrencies, investor sentiment had taken a huge hit in this regard. After a brief lull in crypto interests, the Supreme Court overturned RBI’s directive in late 2020 on the grounds that it had little jurisdictional standing on the matter, which eventually brought back the hype surrounding cryptos. The government, however, had kept mum throughout the whole fiasco.
About a month ago, a draft bill considering a blanket ban of all private cryptocurrencies was drawn up, which led to discontent within several quarters. A few weeks ago, Finance Minister Nirmala Sitharaman acknowledged that the country could not afford to lose out on new tech trends and the government would take a calibrated approach in this regard.
The recent move may possibly be the beginning of that “calibrated approach”. The ministry of corporate affairs (MCA) passed along the recent directive while also stating that the Schedule III of the Companies Act, 2013 has been amended to this effect. The nation has currently more than 7 million investors with a combined investment to the tune of $1 billion in the crypto realm. Crypto exchanges across the country welcomed the move saying it would bring greater transparency in the reporting of investments while enabling companies to be competitive enough in global markets.
This move is a welcome one that is expected to improve the adoption of cryptos by Indian companies. If properly regulated, cryptos have the potential to boost trading and improve the nation’s coffers.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.