Markets in Crypto Assets (MiCA)

News: The first set of comprehensive rules –MiCA - were recently approved by The European Parliament. It will bring largely unregulated cryptocurrency markets under the ambit of government authorities.
 

What are the rules about?
 It will impose compliance on the issuers of crypto assets (any legal person who offers to the public any type of crypto-assets).
 The rules will apply to crypto-asset service providers (CASPs) who provide services like the custody, administration, and exchange of crypto assets.
 It mandates crypto companies to send information about senders and recipients of crypto assets to their local anti-money laundering authority.
Which assets will MiCA cover?
 Crypto assets of not just the traditional cryptocurrencies like Bitcoin, Ethereum, Binance Coin but also to newer ones like stablecoins, Dogecoin etc.
 However, it will exclude central bank digital currencies, non-fungible tokens (NFTs) and other crypto assets already under existing regulation.
Importance:
 Uniformity across 27 EU nations and a competitive edge to its growth.
 22% of the global crypto industry was concentrated in Europe, which received $1.3 trillion worth of crypto assets. Penetration is more in Europe.
 To keep a check on bankruptcies and fraud scandals in the crypto industry which was seen most in 2022 thus it will protect consumers from Fraud and deception.
 It will also keep check on money laundering and terror finance activities via cryptocurrency. 

 

What about Cryptocurrency in India? How is it regulated?
 India is yet to have a comprehensive regulatory framework for crypto assets and the legality of cryptocurrencies in the country is still a grey area.
 However, the Indian government has taken certain steps to bring cryptocurrencies under the ambit of specific authorities and taxation. For example, In the Union Budget 2022, the Finance Ministry imposed a 30% tax on income from the “transfer of any virtual digital asset.”
 All transactions pertaining to virtual digital assets were brought under the purview of the Prevention of Money Laundering Act (PMLA).
 India is now calling for consensus in the G20 grouping, to have a globally coordinated policy response on crypto assets.

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