New rules and regulations in India are being implemented for the proper acceptance of crypto. The government has disclosed these new cryptocurrency rules for exchanges which is effective by 1st April itself. As per these new laws, the companies will have to disclose entire crypto coin holdings. These laws are very important and will have to be strictly followed by all exchanges to operate in the country.
The new Cryptocurrency rules
The Ministry of Corporate Affairs (MCA) has asked all the companies to report any form of transaction in Bitcoin, Litecoin, Ethereum, or any other cryptocurrency. These are cryptocurrencies that come under blockchain technology. Transaction in these is done by users using their own encrypted wallets in exchanges locked by their own passwords. These passwords are basically keys to the encryption of their wallets.
As per the news, the disclosures took place on April 1, 2021. And, the factors that should be taken care of are:-
- Companies should disclose cryptocurrency holdings on the given date of financial agreements.
- A firm has to disclose every profit or loss transactions made, which revolves around any form of blockchain technology.
- If any user is making a deposit or withdrawal for the purpose of investing in cryptocurrency, it has to be disclosed.
This new set of laws are essential for the country. This is because the Reserve Bank of India (RBI) has issued a statement on cryptocurrency, indicating that the government is currently looking to regulate the space more than banning it. Industry insiders have noted this as a sign that the government is serious about regulating cryptocurrencies over the long term. And this is a positive sign for all those investing wizards who wait long to see the growth in their portfolio.
Big ray of hope!
The RBI has previously announced that they will not be able to endorse cryptocurrencies as a legal form of coin. And they will reserve the right to issue their own digital currency to digitize India’s economy. In addition to this, In January 2021, the Indian government introduced a bill into its parliament that proposed a ban on cryptocurrencies except for the digital currency that the RBI plans to issue in the future. So, the MCA crypto regulation comes at a time of legal ambiguity for cryptocurrencies in India.
While the news has caught most of the industry by surprise, many industry leaders are not taking the move lightly. From the unregulated free-for-all Bitcoin to the rigid protocol of Ethereum, there are many cryptocurrencies out there. Some say it’s just another bubble waiting to burst; others say Bitcoin will change everything. But, one thing is for sure, it’s a confusing playground.
The new position of India in the crypto sector
Since 2013, the Reserve Bank of India (RBI) has cautioned citizens about the risks of trading in cryptocurrencies. In the short history of cryptocurrencies, India’s position on Bitcoin and other digital assets has shifted dramatically. Despite the bias against cryptocurrency, India’s central bank has encouraged Indian banks to leverage blockchain technology. It is also currently exploring the possibility of issuing a central bank digital currency backed by the Indian rupee.
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