As the cryptocurrency mania lingers on, top companies and banks around the world are getting inclined with the digital currency.
Cryptocurrency, also known as virtual or digital currency, is perceived to be a more unambiguous treasury administration tool for superior management of working capital. It is also used to pay subsidiaries, vendors, suppliers while being watchful about regulatory conformity.
Despite the skepticism, some firms and financial institutions seek to use cryptocurrency for their in-house procedures established on blockchain technology. Companies such as Hindustan Unilever Ltd. (HUL), Reliance Industries Ltd. (RIL), HDFC Bank, and ABG Shipyard operate such conducts for internal treasury management, report keeping, and market finance operations.
“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,” said a spokesperson from one of the companies.
According to KPMG partner and head in India, Sai Venkateshwaran said that many huge firms are analyzing diverse use occasions of the blockchain. This includes the handling of intra-group transactions as well as a plausible expansion as it seeks at its utilization as a group treasury management tool to create more cost-effective cash and grinding out capital management.
The Financial Stability Board noted that cryptocurrencies do not pose a threat to the global economy. The evaluation could affect India since its central bank is part of the board. However, the RBI’s report from last week provides new hope to the nation’s cryptocurrency arena, with assurances indicating ease of its perspective on digital assets.
Businesses and merchants alike have been expressive regarding the necessity for more regulation in the crypto industry. They suggest that the deficiency in transparency in terms of asset legality will generate opportunities for government abuse.