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Wednesday, April 14, 2021

Crypto rules just about ‘disclosure’, not a guide to govt stance on ban

The new norms, notified in March, require that corporates disclose any profit or loss on transactions involving cryptocurrency, crypto holdings, and deposits or advances received from anyone for the purpose of investing in cryptocurrencies in statutory filings to Registrar of Companies.

Written by Karunjit Singh | New Delhi |
Updated: April 8, 2021 7:23:16 am
Industry players had welcomed the disclosure requirements as a sign of the government’s intent to regulate cryptocurrencies.

New regulations requiring corporates to disclose all dealings in cryptocurrencies do not indicate that the government has taken a stance to regulate rather than ban such currencies, a senior government official told The Indian Express.

The new norms, notified in March, require that corporates disclose any profit or loss on transactions involving cryptocurrency, cryptocurrency holdings, and any deposits or advances received from anyone for the purpose of investing in cryptocurrencies in statutory filings to the Registrar of Companies.

Industry players had welcomed the disclosure requirements as a sign of the government’s intent to regulate cryptocurrencies and noted that the move would boost awareness and acceptance of cryptocurrencies as well as give comfort to companies with cryptocurrency holdings.

“This is just about disclosure,” said a government official, adding the Corporate Affairs Ministry had received complaints that certain companies were luring people to invest in schemes investing in cryptocurrencies by promising high returns.

The official noted that the decision on whether cryptocurrencies would be banned would be taken by the Department of Economic Affairs under the Finance Ministry.

The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, which aims to prohibit all private cryptocurrencies and lays the regulatory framework for the launch of an “official digital currency” was set to be introduced in Parliament during the Budget session, but was not taken up.

A high-powered inter-ministerial committee has also previously recommended the banning of all private cryptocurrencies.

Finance Minister Nirmala Sitharaman has, however, recently noted that the Centre would take a calibrated approach to cryptocurrencies and would not close the window on experimentation with cryptocurrencies.

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