9 Oct, 2019

Indian Corporate Giants Mull Using In-house Cryptocurrencies

As Indian cryptocurrency community waits with bated breath for January 15, for the Supreme Court to weigh in on the status of cryptocurrency trading, some top organizations have already taken matters into their own hands.

News portal Economic Times, recently reported, that some top organizations such as Hindustan Unilever Ltd (HUL), Mukesh Ambani-led Reliance Industries Ltd (RIL), HDFC Bank and ABG Shipyard, among others, have launched blockchain and crypto based projects for internal treasury management, record keeping, payments, trade and finance functions and more functions.

A person familiar with the developments told the portal that, “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 and accounts shall be reconciled at a later date.” The source added that so far there has not been definite timeline set for scaling up the usage.

Interestingly, what these companies propose to do in the future, may come under private cryptocurrencies. Earlier, Crypto-News India had reported that the Finance Ministry may consider banning ‘private crypto’. At the time, during the 19th meeting of the Financial Stability and Development Council (FSDC), it was decided, “The Council also deliberated on the issues and challenges of Crypto Assets/Currency and was briefed about the deliberations in the High-level Committee chaired by the Secretary (Economic Affairs) to devise an appropriate legal framework to ban use of private crypto currenciesin India and encouraging the use of Distributed Ledger Technology, as announced in the Budget 2018-19.”

The event was attended by the Who’s Who of the financial scene in India such as Urjit R. Patel, Governor, Reserve Bank of India (RBI); Hasmukh Adhia, Finance Secretary and Secretary, Department of Revenue; Subhash Chandra Garg, Secretary, Department of Economic Affairs; Rajiv Kumar, Secretary, Department of Financial Services; Injeti Srinivas, Secretary, Ministry of Corporate Affairs; Ajay Prakash Sawhney Secretary, Ministry of Electronics and Information Technology; Ajay Tyagi, Chairman, Securities and Exchange Board of India (SEBI), among others.

While the move, when it swings into place, sounds promising and progressive, it remains to be seen, how exactly the scenario plays out post January 15.