GS Paper: GS3-15.Science and Technology- Developments and their Applications and Effects in Everyday Life.

The Markets in Crypto-Assets (MiCA) law of European Parliament is the first comprehensive regulation for cryptos, and some expect it to become a trendsetter for crypto regulation globally.

What is MiCA Legislation?

• The MiCA law seeks to address concerns like money-laundering, protection of consumers and investors, accountability of crypto firms, stablecoins and the environmental footprint of crypto mining.
• It would regulate the “wild west” of crypto assets and provide legal certainty for those issuing crypto assets, while ensuring high standards for investors and consumers.
• It also excludes non-fungible tokens, but the EU may make a horizontal legislation for NFTs in 18 months, after a separate assessment.

How will MiCA regulate stablecoins?

• The efficacy of stablecoins, which claim to be less volatile that other cryptos, came into question after the crash of some crypto-currencies.
• The MiCA would mandate that stablecoin issuers maintain minimum liquidity to provide for sudden large withdrawals by users, and the reserves must also be protected from insolvency.
• The European Banking Authority (EBA) has been brought in to supervise stablecoins, and the law asks stablecoin issuers to provide claims to investors free of charge.
• In addition, large coins which are used as a means of payment will be capped at €200 million worth of transactions per day.

How will the new law regulate money laundering?

• MiCA requires the EBA to maintain a public register of non-compliant crypto asset service providers (CASPs).
• Additional checks will be required, in line with the EU Anti-Money-Laundering (AML) framework.

How does it address green concerns?

• Under 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 methodologies, content and presentation of such information.
• The EC will also have to provide a report on the impact of crypto assets on environment.
• It would introduce mandatory minimum sustainability standards for mining mechanisms, especially the proof-of-work system which raises overall computing power.

Will it affect Indian regulations?

• India’s crypto regulations seem to have taken a back seat at the moment.
• Industry executives and experts say the government and industry are more concerned about taxation.
• India levied a 30% tax on income from transfer of cryptos from April, and added a 1% tax deduction at source from 1 July.
• This, along with the overall bear market, has depressed trading volumes, and revenues of crypto exchanges.
• Indian regulators are also expected to consider rules being developed in the US before taking concrete decisions.

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Back2Basics: Stablecoins

• Stablecoins are cryptocurrencies where the price is designed to be pegged to a cryptocurrency, fiat money, or to exchange-traded commodities (such as precious metals or industrial metals).
• Advantages of asset-backed cryptocurrencies are that coins are stabilized by assets that fluctuate outside of the cryptocurrency space, that is, the underlying asset is not correlated, reducing financial risk.
• Bitcoin and altcoins are highly correlated, so that cryptocurrency holders cannot escape widespread price falls without exiting the market or taking refuge in asset backed stablecoins.
• Furthermore, such coins, assuming they are managed in good faith, and have a mechanism for redeeming the asset(s) backing them, are unlikely to drop below the value of the underlying physical asset, due to arbitrage.

 

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Context

Bill Gates recently announced the decision to launch his own nuclear reactor with an eye on the possibility of exporting fast breeder reactors to power-hungry nations.

About the Gates plan

• TerraPower, the nuclear company founded by Mr. Gates, has just announced an agreement with private funders, including Warren Buffett, and the State of Wyoming, U.S. to site its Natrium fast reactor demonstration project there.
• Moreover, since it falls within the “advanced” small modular reactor project of the U.S. Department of Energy (DOE), the Department will subsidise the project to the extent of $80 million this year.
•  Mr. Gates believes that the fast breeder reactors will replace the current reactors.
• The DOE and other nuclear enthusiasts also believe that small, factory-built, modular reactors will be cheaper and safer, and will be so attractive to foreign buyers.

The impact of Fukushima Daiichi accident on nuclear power situation

• The Fukushima Daiichi accident in Japan on March 11, 2011 completely transformed the nuclear power situation.
• Countries phased out nuclear power: As the global community turned its attention to strengthening nuclear safety, several countries opted to phase out nuclear power. 
• The nuclear industry was at a standstill except in Russia, China and India.
• Liability clause in India: Even in India, the expected installation of imported reactors did not materialise because of our liability law and the anti-nuclear protests in proposed locations.
• India had to go in for more indigenous reactors to increase the nuclear component of its energy mix.

Regaining place as a climate-friendly energy option

• Two factors have contributed to the emergence of nuclear power as a climate-friendly energy option once again after the Fukushima Daiichi accident:-
• 1) Intensive efforts to strengthen nuclear safety, and
• 2) Threat of global warming is becoming ever more apparent.
• Countries such as Japan and Germany reopened their reactors to produce energy.
• Organisations such as the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA) recognise the ability of nuclear power to address major global challenges.

Challenges ahead

• Delay in adoption: Even as IPCC and IEA recognise the importance of nuclear power, it remains uncertain whether the value of this clean, reliable and sustainable source of energy will achieve its full potential any time soon.
• Policy and financing framework issue: In some major markets, nuclear power lacks a favourable policy and financing framework that recognise its contributions to climate change mitigation and sustainable development.
• Without such a framework, nuclear power will struggle to deliver on its full potential, even as the world remains as dependent on fossil fuels.

Concerns with Gates plan

• Proliferation risk: TerraPower announced in March that Natrium would be fuelled with uranium enriched to 20% U-235 rather than explosive plutonium.
• The critics believe that there will be a rush to make 20% enriched uranium world wide.
• The main objection to nuclear enrichment beyond a point in Iran arises from the fact that it would lead to weapon-grade uranium being available for them.
• Facilitates the production of material used as nuclear explosives: The other objection being raised against is that the principal reason for preferring fast reactors is to gain the ability to breed plutonium.
• That is surely what foreign customers will want.
• The way it is configured, the reactor would make and reuse massive quantities of material that could also be used as nuclear explosives in warheads.
• Focus on India and China: The opponents of TerraPower believe that India and China will be encouraged in their efforts to develop fast breeder reactors and may even want to buy them from Mr. Gates.
• India’s fast breeder reactor, which is not subject to international inspections, is seen as capable of feeding the nuclear weapons capability of India.

Conclusion

With the threat of global warming due to climate change amplifying with each coming day, the world needs to take a serious relook at the adoption of nuclear technology.

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Back2Basics: What is a fast breeder reactor?

• This special type of reactor is designed to extend the nuclear fuel supply for electric power generation.
• Whereas a conventional nuclear reactor can use only the readily fissionable but more scarce isotope uranium-235 for fuel, a breeder reactor employs either uranium-238 or thorium, of which sizable quantities are available.
• Uranium-238, for example, accounts for more than 99 percent of all naturally occurring uranium.
• In breeders, approximately 70 percent of this isotope can be utilized for power production.
• Conventional reactors, in contrast, can extract less than one percent of its energy.

Natrium fast reactor demonstration project

• Natrium nuclear power plants represent a significant advance over the light water reactor plants in use today.
• The Natrium plant uses a sodium-cooled fast reactor as a heat source.
• This heat from the reactor is carried by molten salt from inside the nuclear island to heat storage tanks outside the reactor building, where it is utilized as needed for generating electricity or industrial processes.
• The net effect is that the overall plant can load follow, thus increasing the revenue and value of the plant while maintaining the optimum constant reactor power.
• At the same time the cost of the overall plant is reduced since many of the systems outside of the nuclear island need not be nuclear safety grade.
• The Natrium reactor enables these abilities because it operates in much higher temperature regimes than the light water reactor, thus pairing well to the temperature requirements of the molten salt heat transfer medium.

A notable actor has filed a lawsuit in the Bombay High Court against the 5G telecom technology up-gradation, trial runs for which have started in India now.

What is 5G technology?

• 5G or fifth generation is the latest upgrade in the long-term evolution (LTE) mobile broadband networks.
• It mainly works in 3 bands, namely low, mid and high-frequency spectrum — all of which have their own uses as well as limitations.

Issues with the rollout

• However, 5G and its rollout in many countries have been hampered due to fears over health concerns even some conspiracy theories as well, which have tried to link it with the coronavirus among other things.
• The recent lawsuit is asking questions around the overall impact of 5G and low intensity radiofrequency (RF) electronic magnetic field (EMF) radiation on human health, and its environmental impact as well.
• These concerns, while not yet proven, have been raised by various scientists before too.

Arguments raised in the lawsuit

• It has stated that the ‘radiation’ it will emit will be “extremely harmful and injurious to the health and safety of the people”.
• While using wireless devices one is in a constant dilemma about “RF radiation from wire-free gadgets and network cell towers”.
• There is sufficient reason to believe that the radiation is extremely harmful and injurious to the health and safety of the people.
• It wants the concerned department to certify that 5G technology is safe for humans and also animals and birds.

Why is 5G essential?

• 5G promises to revolutionize mobile broadband and is a big generational leap over the existing 4G technology.
• This new technology will be capable of not just ensuring fast internet on our phones, but also help power IoT (Internet of Things) networks to run connected cars and homes smarter.
• It will also support the streaming of rich media.

Rollout status in India

• 5G has not yet been rolled out in India though some companies have been given a trial spectrum to test 5G technology in the country.
• Once this is over, it is expected that networks will go live with the 5G bands by the end of this year.
• The 5G rollout is expected to gather pace in the country by 2022.

Fear around the impact of 5G radiation on human health

• The claim is that the more powerful 5G waves will emit more radiation and cause harm to humans as well as other living beings.
• Also, 5G will require more towers in order to ensure better connectivity, and since it will power more than just our smartphones, it will increase human exposure to such radiation in general.
• This is an extension of the idea that cellular towers, which emit low-level RF-EMF radiation, are in general damaging our bodies.
• But radiation from cellphone towers, mobile phones, WiFi routers is typically called non-ionizing radiation like radio waves, microwaves, and optical radiation.
• RF fields have been classified by WHO’s International Agency for Research on Cancer (IARC) as possibly carcinogenic to humans (Group 2B).

Layman understandings over such radiations

• There’s no doubt that radiation at very high levels, also referred to as ionizing radiation, heats up our tissue and can eventually lead to cancer.
• This applies to medical devices such as a CT-scan machine or X-ray machine, which emit high-level ionizing radiation.
• That’s exactly why doctors don’t recommend that you go get a CT scan for every health issue because it does increase unnecessary exposure to radiation.
• But there are increasing concerns that our smartphones, other WiFi-ready devices such as laptops, and mobile phone towers which also emit low-level RF radiation are damaging our bodies given the constant exposure.

What WHO has to say?

• On its page on 5G, the World Health Organization (WHO) says “no adverse health effect has been causally linked with exposure to wireless technologies.”
• But it also states that “only a few studies have been carried out at the frequencies to be used by 5G.”
• Given the growing concerns, the WHO is conducting “a health risk assessment from exposure to radio frequencies, covering the entire radiofrequency range, including 5G.”
• This study will be published by 2022.