A Turning Point in Crypto Regulation

1. A Turning Point in Crypto Regulation, led A Turning Point in Crypto Regulation, led by Europe by Europe For Mains The Advantages of Crypto Currency Crypto is an Internet-native asset not limited by geographical boundaries. To transfer crypto, one does not need a pipeline or shipping container. Crypto assets are not issued or controlled by any enterprise hence are market determined which allows for higher transparency. The concerns about crypto currency Regulating crypto currency is not easy.

2. Monitoring the flow of capital to and from a country becomes a major point of concern. Usage/Misuse of crypto currencies by organised crime groups and even terrorist organisations are a major concern. What is the Regulation of Markets in Crypto-Assets, or MiCA? The European Commission’s Regulation of Markets in Crypto-assets (MiCA) proposal is a regulatory framework developed since 2018 to help regulate currently out-of- scope crypto-assets and their service providers in the EU and provide a single licensing regime across all member states by 2024. MiCA aims to “harmonise the European framework for the issuance and trading of various types of crypto token as part of Europe’s Digital Finance Strategy” It proposes to regulate crypto asset services and crypto asset issuers. By regulating these entities, Europe intends to provide consumer protection, transparency, and governance standards, regardless of the decentralised nature of the technology. Then, MiCA goes further to put forth specific regulations for stablecoins, rightly demarcating them from other crypto assets. Under MiCA, stablecoin issuers must maintain reserves to cover all claims of the coins, and should implement a

3. process for immediate redemption if and when holders seek one. What are Stablecoins? Stablecoins are cryptocurrencies the value of which is pegged, or tied, to that of another currency, commodity or financial instrument. Stablecoins aim to provide an alternative to the high volatility of the most popular cryptocurrencies. Stablecoins pursue price stability by maintaining reserve assets as collateral or through algorithmic formulas that are supposed to control supply. India can use the European regulation as a model and adapt a suitable legislation to regulate the crypto market in the country. For More Information, please visit Believers IAS. They are one of the Best IAS Coaching in Bangalore at BTM Layout for aspirants preparing for recruitment exams conducted by UPSC. Renowned as Top IAS Coaching in Bangalore.