TMS Ep386: Crypto under PMLA, SEBI on PCVs, power stocks, sovereign default

Regulatory net continues to tighten around cryptocurrencies in India. The government has now brought the trading of cryptocurrencies and digital assets under the ambit of the Prevention of Money Laundering Act. Last year, ​ it had introduced a 30% income tax on gains made from it. So, will the recent move sound a death knell for the industry? Or is this a sign that the government is willing to give regulation a try, instead of outright banning cryptos? And how will it impact investors?

Bringing cryptocurrencies under the regulatory umbrella may be followed by another regulatory change -- this time from Sebi. The markets regulator is mulling on allowing permanent capital vehicles or PCVs in India. Unlike regular private equity and venture capital funds, which have a limited life cycle, PCV can last in perpetuity. Famous investment house Berkshire Hathaway is one of its examples. So why does India not have its own Warren Buffet? And how will the investment scenario change if PCVs are allowed?

India’s march towards becoming an economic superpower comes with a cost: a rapid rise in electricity consumption. In February, the country’s power consumption rose over 9% year on year. And analysts believe that as the country comes under the grip of summer, rising power demand will fire up related stocks over the long-term. While they expect solar-powered companies to benefit from rising temperatures, lack of rainfall may put hydro-power and thermal-power companies at a disadvantage.

Meanwhile, in neighbouring Pakistan, cities are erupting in protests due to prolonged power outages. February’s retail inflation has soared past 31%, and the Pakistani rupee has devalued by 30% during 2022. The country is staring at a sovereign default. But what is a sovereign default? We explain it in this episode of the odcast and more.