The Indian government is making its first move towards regulating bitcoin and other cryptocurrencies by making it mandatory for all companies to disclose transactions using virtual currencies.
As one of the world’s most populous countries, India’s move to regulate cryptocurrencies is bound to ripple effects across all virtual currencies out there. It’s also a sign of the growing popularity and use of such currencies, suggesting that they’re here to stay for good.
The decision was announced by the Ministry of Corporate Affairs (MCA) this Thursday, and is only applicable to investments, transactions, or transfers of cryptocurrencies taking place in India. This move is expected to make the country’s digital currency markets more transparent, fair, and more attractive for all parties involved.
Naturally, having a more transparent market also means that the powers that be can more reliably track when and where money changes hands.
Still, what the government hopes to achieve with this move is a more competitive local crypto market, a higher rate of cryptocurrencies being adopted on an institutional level, and to boost the use of such currencies at home.
Boiled down, the decision requires every company to disclose any profits or loss produced from transactions using virtual currencies, as well as how much of these currencies they hold. Deposits or advances in virtual currencies performed by any actor for the purposes of trading or investing with said company will also have to be disclosed.
The decision comes into force in the upcoming financial year, according to MCA.
According to Indiatoday, the country boasts an estimated 7 million cryptocurrency investors, believed to hold a total of over $1 billion in assets in India.
Whatever your opinion on cryptocurrencies is, the fact of the matter is that they’re likely here to stay. As more and more entities and states approve of and regulate their use, virtual currencies gain more inertia and more perceived value in the eyes of individuals. Not many people would be willing to buy money they can’t spend anywhere. As they become more accepted, however, more people will buy Bitcoin and other similar cryptocurrencies, and more companies will start accepting them to facilitate their customers.
It will definitely be interesting to see how the use of cryptocurrency evolves in the future, especially for someone like me — I grew up with old-fashioned, paper-and-plastic money; I remember how awkward it felt the first time I used a debit card to pay for anything.
Another very real point of concern is that virtual currencies are usually very energy-intensive to produce. Bitcoin mining is already consuming more energy than Argentina; imagine what it will look like if cryptocurrencies ever really take off.
Judging from how things are shaping up, we won’t have to imagine it for much longer, however.