Despite Ban, Indian Companies Are Using Cryptocurrencies For Internal Use

In spite of a ban on usage of cryptocurrency in India, stated by the Reserve Bank of India, various top companies are experimenting with the use of cryptocurrencies, according to a new report.

Companies such as Hindustan Unilever Ltd. (HUL), a Mumbai-based consumer goods company, Reliance Industries Ltd. (RIL), HDFC Bank and ABG Shipyard, and many more are using the cryptos and its blockchain technology for their internal use.

The use of digital currency is for operations such as treasury management, record keeping, payments, trade and finance functions, and more to further enhance the companies’ businesses.

One unknown person told The Economic Times, “The cryptocurrency would only be used by the companies and banks internally. It will mainly be effective as a working capital management tool, where rather than actually transferring money, cryptocurrency will be transferred and accounts shall be reconciled at a later date.”

Additionally, the use of cryptocurrency is under the pilot program by the companies. If at all the pilot programs become a success, the use of cryptos will be extended to broader usage.

Legal Implications Of Using Cryptocurrency In India

While the addition of blockchain tech and cryptocurrency will be a helpful tool for record maintenance as well as transactions, it also has legal implications to it which need to be well-considered by the companies.

The two most prominent factors to be considered is the tax angle and accounting angle. Although concerned departments handling these issues think that those could be “dealt with at a later stage.”

To recall, back in July 2018, RBI had ordered the various financial institutions not to indulge in cryptocurrency-related businesses.