On June 30, the European Parliament agreed a new law to regulate cryptocurrencies. Markets in Crypto-Assets (MiCA) law is the first comprehensive regulation for crypto, and some expect it to become a trendsetter for crypto regulation on a global scale. Mint explains:
What is the EU’s new MICA law?
The MiCA law seeks to address concerns such as money-laundering, protection of consumers and investors, accountability of crypto firms, stablecoins and the environmental footprint of crypto mining. Stefan Berger, one of the key lawmakers in the formation of MICA, said it would regulate the “wild west” of crypto assets and provide legal certainty for crypto asset issuers, while ensuring high standards for investors and consumers. . It does not include non. -Funable tokens, but after a separate assessment from the European Commission (EC), the EU may enact a horizontal law for NFTs in 18 months.
How will MiCA control stablecoins?
The efficacy of stablecoins, which claims to be less volatile than other cryptos, came under question after the crash of Terraform Labs’ Luna token. MiCA will mandate that stablecoin issuers maintain minimum liquidity for sudden large withdrawals by users, and reserves must also be protected from insolvency. The European Banking Authority (EBA) has been brought in to oversee stablecoins, and the law calls on stablecoin issuers to provide claims to investors for free. In addition, large coins used as a means of payment will be limited to transactions worth €200 million per day.
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How will the new law control money laundering?
MiCAs require the EBA to maintain a public register of non-compliant crypto asset service providers (CASPs). Additional investigations will be required, in line with the EU Anti-Money-Laundering (AML) framework, for CASPs located in countries that are considered to be at high risk of laundering activities, and jurisdictions that are used for EU tax purposes. non-cooperative”.
How does it address green concerns?
Under the MiCA, crypto companies will be required to declare their environmental and climate footprint. The European Securities and Markets Authority will develop regulatory technical standards on the methodology, content and presentation of such information. The EC will also have to submit a report on the impact of crypto assets on the environment, and the introduction of mandatory minimum stability standards for mining systems, specifically proof-of-work systems that increase overall computing power.
Will it affect Indian rules?
India’s crypto regulations seem to have taken a back seat at the moment. Industry officials and experts say the government and industry are more concerned about taxation. India imposed a 30% tax on income from transfers of crypto from April, and added a 1% tax deduction at source from July 1. This, along with the overall bear market, has resulted in a drop in trading volume and revenues of crypto exchanges. Indian regulators are also expected to consider the rules being developed in the US before making a sound decision.