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With reference to the Markets in Crypto Assets (MiCA) regulation, consider the following statements:
1. It has been approved by the European Union (EU) to bring largely unregulated cryptocurrency markets under government regulation.
2. It will also regulate central bank digital currencies issued by the European Central Bank.
Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
With reference to the Markets in Crypto Assets (MiCA) regulation, cons...
Explanation:
1. MiCA Regulation:
The Markets in Crypto Assets (MiCA) regulation has indeed been approved by the European Union (EU) with the aim of bringing largely unregulated cryptocurrency markets under government regulation. This regulation is designed to provide clarity and legal certainty for market participants while also ensuring investor protection.
2. Regulation of Central Bank Digital Currencies:
While MiCA primarily focuses on regulating crypto assets and related activities, it does not directly regulate central bank digital currencies issued by the European Central Bank (ECB). Central bank digital currencies fall under the purview of the ECB and are subject to separate regulations and guidelines.
Therefore, statement 1 is correct as MiCA is indeed intended to regulate cryptocurrency markets, but statement 2 is incorrect as MiCA does not regulate central bank digital currencies issued by the ECB.
1. MiCA Regulation:
The Markets in Crypto Assets (MiCA) regulation has indeed been approved by the European Union (EU) with the aim of bringing largely unregulated cryptocurrency markets under government regulation. This regulation is designed to provide clarity and legal certainty for market participants while also ensuring investor protection.
2. Regulation of Central Bank Digital Currencies:
While MiCA primarily focuses on regulating crypto assets and related activities, it does not directly regulate central bank digital currencies issued by the European Central Bank (ECB). Central bank digital currencies fall under the purview of the ECB and are subject to separate regulations and guidelines.
Therefore, statement 1 is correct as MiCA is indeed intended to regulate cryptocurrency markets, but statement 2 is incorrect as MiCA does not regulate central bank digital currencies issued by the ECB.
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Community Answer
With reference to the Markets in Crypto Assets (MiCA) regulation, cons...
- Recently, European Union Parliament approved Crypto Licensing, Funds Transfer Rules.
- Markets in Crypto Assets (MiCA) forms part of the European Union’s (EU) broader digital financial package, which includes the Digital Operational Resilience Act and Pilot Regime on Distributed Ledger Technology. It aims to embrace innovation and new financial technologies while ensuring consumer protection and financial stability across the EU. Hence, statement 1 is correct.
- The MiCA legislation will apply to crypto assets including traditional cryptocurrencies like Bitcoin, Ethereum, and newer ones like stablecoins.
- MiCA will not regulate central bank digital currencies issued by the European Central Bank, nonfungible tokens (NFTs) and digital assets issued by national central banks of EU member countries. Hence, statement 2 is not correct.
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With reference to the Markets in Crypto Assets (MiCA) regulation, consider the following statements:1. It has been approved by the European Union (EU) to bring largely unregulated cryptocurrency markets under government regulation.2. It will also regulate central bank digital currencies issued by the European Central Bank.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?
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