In a first, the ministry of corporate affairs (MCA) has asked all companies in the country to mandatorily disclose any dealings in cryptocurrency or virtual currency in their balance sheets. This is a major step towards regulating crypto assets in India and is expected to bring in a lot of transparency in reporting or filing of crypto investments.
The companies have to disclose profit or loss on transactions involving cryptocurrency or virtual currency, the amount of holding, and details of deposits or advances from any person for the purpose of trading or investing in cryptocurrency or virtual currency, according to the latest amendments to the Schedule III of the Companies Act, 2013. This will be applicable from the upcoming financia lyear, MCA said in a notification on Wednesday.
“From regulation to a complete ban, there are many competing theories as to what the actual legislation will be. Keeping that narrative in mind, the fact that the government has asked for disclosures, it may look to perhaps regulate rather than ban cryptocurrencies. But these are still early days and the most important piece of regulation is still to come,” said G.V. Anand Bhushan, partner, Shardul Amarchand Mangaldas.
There are estimated to be around 10 million individual crypto investors in India, but the number of companies having exposure to this avenue is not known.