European Union has become the first primary jurisdiction to introduce Markets in Crypto Assets (MiCA). These are the first set of rules by the European Parliament that brings the largely unregulated crypto market under government regulation. The regulation of MiCA came into force with the formal approval of the member states of the European Council.
The MiCA aims to provide a legal framework for all investors by establishing standardized rules within the territory of the EU. The rules will also protect the consumers from fraud and provide security and bring regulation to the Crypto Industry.
The increasing investment in the crypto industry leads the European Union’s policymakers to bring government regulation in the crypto markets to maintain stability. EU also wants to gain an edge over its competitive crypto markets of the USA and UK and become a global leader in the crypto Industry.
The MiCA incorporates Crypto Assets Service Providers including trading, exchange platforms, wallet providers, and crypto advisors. New rules under the MiCA, CASP must be authorized as a legal entity in the EU. As a regulator, the European Banking Authority will supervise the CASP.
In India, the government is also keen to take steps in the regulation of crypto by imposing a 30% tax on the income derived from crypto and introducing the Prevention of Money Laundering Act (PMLA) which encompasses all the Virtual Digital Assets or (VDA).
The MiCA regulation by the EU can become a pathfinder for India’s crypto regulations. In this way, India can benefit from it in two ways. India can incorporate some parts of MiCA into its regulation providing a borderless common framework. This could help National and International companies with the higher adoption of Web 3.0 technology. Secondly, the 2023 G20 summit presidency by India. All the member nations are working together to make a consensus on the regulation of the crypto asset industry. In this summit, India can bring together all the nations to provide a consensus on global regulation of crypto.