EU agrees upon MiCA

EU agrees upon MiCA

News: Recently, EU Parliament agreed upon a new law Markets in Crypto-Assets (MiCA) to regulate cryptocurrencies.

MiCA seek to do?
• It seeks to address concerns like money-laundering, protection of consumers and investors, accountability of crypto firms, stablecoins and the environmental footprint of crypto mining.
• It excludes NFT (non-fungible tokens)

What are its key provisions?
• MiCA would mandate currencies like stablecoin issuers to maintain minimum liquidity to provide for sudden large withdrawals by users, and the reserves must also be protected from insolvency.
• Large coins which are used as a means of payment will be capped at €200 million worth of transactions per day.
• The European Banking Authority (EBA) has been brought in to supervise stablecoins, and the law asks stablecoin issuers to provide claims to investors free of charge.
• MiCA requires the EBA to maintain a public register of non-compliant crypto asset service providers (CASPs).
• Under MiCA, it will be mandatory for crypto companies to declare their environmental and climate footprint.

Steps taken by India:
• India levied a 30% tax on income from the transfer of cryptos from April and added a 1% tax deduction at source from 1 July.