EU Introduces MiCA

• The European Parliament has approved the Markets in Crypto Assets (MiCA) regulation, which aims to bring largely unregulated cryptocurrency markets under government regulation.
• The regulation prescribes different sets of requirements for crypto asset service providers (CASPs) depending on the type of crypto assets.

https://www.mondaq.com/uk/fin-tech/1263152/eu-markets-in-crypto-assets-mica-regulation-expected-to-enter-into-force-in-early-2023

Assets Covered under MiCA:

• This definition implies that it will apply not only to traditional cryptocurrencies like Bitcoin and Ethereum but also to newer ones like stablecoins.

New Rules under MiCA:

• Crypto-Asset Service Providers CASPs must be incorporated as a legal entity in the EU.
• They can get authorized in any one member country and operate across all 27 countries

Importance

• The MiCA regulation will protect consumers against deception and fraud, regain their trust in the sector, and bring compliance to the issuers of crypto-assets and CASPs.
• It will give the EU a competitive edge in its growth compared to the US or UK, which lack regulatory clarity.

India’s Approach Towards Crypto:

• India is yet to have a comprehensive regulatory framework for crypto assets; however, a draft legislation on the same is reportedly in the works.
• In 2020, the Supreme Court of India removed the ban on cryptocurrencies imposed by RBI.

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