The Indian Ministry of Corporate Affairs (MCA) regulates companiesin India.
In a welcome move which begins to legalise cryptocurrencies inIndia, the MCA has issued notification that now mandates all companies whichhave invested, traded, dealt in any cryptocurrency during the reportedfinancial year to disclose details.
Such disclosures will be required from the next financialyear i.e. from April 1, 2021 onwards.
Technically, any company which has invested or traded in cryptocurrency,virtual currency during a financial year are now required to disclose profit orloss on transactions involving the same.
Further, the amount of currency of cryptocurrency or virtualcurrency held at the reporting date has to be reported.
In addition, deposits or advances from any person for thepurpose of investing or trading in cryptocurrency or virtual currency have tobe reported.
In other words, with this rule the Indian government is recognisingthe cryptocurrencies as a store of value just like its national fiat currencyof Rupee.
(Explainer: A fiat currency is one whose supply isarbitrarily maintained e.g. by printing more currency notes or extinguishing currencyand it not backed by a store of value e.g. physical reserves of gold.)
Indian companies dealing in cryptocurrencies are welcomingthese new regulations, echoing the above-detailed rationale.
Monark Modi, founder and CEO of Indian cryptocurrencyexchange Bitex informed Business Today that this action is a “definiteendorsement” and lauded that India is “not falling behind the globalcryptocurrency race.”
Also, the Indian government is working on further laws togovern cryptocurrencies.