Regulatory Challenges of Cryptocurrency Adoption in Corporate Finance

ABSTRACT Cryptocurrency adoption in corporate finance presents significant opportunities for innovation, efficiency, and diversification, yet it is accompanied by complex regulatory challenges, especially in the Indian context. This study explores the regulatory barriers impeding the integration of cryptocurrencies within Indian corporate finance, focusing on key issues such as legal ambiguity, taxation policies, compliance requirements, and investor protection. Using a mixed-methods approach, data was collected from 30 corporate finance professionals through structured surveys and qualitative interviews. The findings reveal that regulatory uncertainty, particularly the lack of a unified legal framework and fluctuating government policies, is the foremost obstacle limiting corporate adoption of cryptocurrencies. High taxation rates and the non-deductibility of losses further discourage corporate participation, while compliance with anti-money laundering (AML) and know-your-customer (KYC) norms presents operational challenges. Comparative analysis with global regulatory frameworks highlights India’s need to align with international best practices to foster a more supportive environment. The study also identifies corporate strategies for mitigating these challenges, such as enhanced due diligence and technology adoption. Based on these insights, the research recommends policy reforms aimed at clarifying regulatory guidelines, rationalizing tax policies, and strengthening investor protections. These measures are essential to balance innovation with financial stability and enable Indian corporations to harness the full potential of cryptocurrencies in their financial operations. This study contributes to the growing body of knowledge on digital asset regulation and offers practical guidance for regulators and corporate managers alike. Keywords: Cryptocurrency, Corporate Finance, Regulatory Challenges, Taxation, Compliance