Companies must disclose their Crypto Holdings: Government of India.
As the Indian government requires companies to disclose their crypto holdings, the industry welcomes this move while keeping its expectations low.
While the government of India thinks about a ban on crypto, it is tightening the screws about the existing regulation. The Indian Ministry of Corporate Affairs stated last Wednesday that all companies incorporated in India should disclose crypto holdings and dealings, starting on April 1.
Executives in the Indian crypto industry stated that the government’s recognition of crypto holdings is a welcome move, although the rule change should not be interpreted as hope that the government’s tabled motion for a crypto ban is expected to fail.
Ban’s Implications
Aside from crypto holdings, the new rules require the companies to disclose the total profit or loss on crypto transactions, and also any deposits or advances received for crypto trading.
The CEO of the Indian crypto exchange PocketBits, Sohail Merchant, thinks it shows that India’s government had come a long way. When he launched his company in 2016, it took him many months to get the approval for registration as the company documents mentioned Bitcoin. But things are different nowadays:
“Regulators now understand the importance of embracing crypto,” he said.
All Are Quiet on the Ban Front
The issue that largely remains is the prospect of a potential ban on crypto. In late January, the Parliament of India tabled “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021.”
The bill sought to ban all “private cryptocurrencies”, save for certain unnamed exceptions.
It essentially fueled much anxiety in the Indian crypto industry. However, the Indian representatives stated that they breathed heavy sighs of relief when the finance minister toned down the government’s previous position.
Minister Sitharaman stated that the government will allow “a window of experiment for crypto,” which they had interpreted as a change in tone because he eventually mentioned crypto, not just blockchain.
Because things are very intense, any ministerial statement or any new government directive like the new disclosure requirements, are examined for hints regarding how India’s parliament could vote on the crypto ban.
Sidharth Sogani, the head of the industry pressure group, the Association for Blockchain, Crypto, stated that the new disclosure rules are nothing special.
“It’s basic data collection by the government, and it can go either way,” he said.
Although any recognition is better than being ignored, Jagdish Pandya stated, chairman of Block on Capital, a blockchain advisory company.
“While this does not suggest a full-fledged regulation through legislation yet,” he stated, “such small steps still matter.”
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