An architect of MiCA on regulating crypto

Duckbucks: Some say that the U.S. innovates, and Europe regulates. Does regulation hinder innovation? How would you frame Europe’s approach compared with the U.S. and other relevant financial centers?

Peter Kerstens: Often people say, “if you regulate this, do you stop innovation or do you help innovation?” I firmly believe that regulating this space or providing a legal framework around it definitely helps innovation. That was also our intention, because this had a long trajectory. The original idea for what eventually became the Markets in Crypto-Assets Regulation (MiCA) emerged back in 2018, during the big first Bitcoin bubble. Bitcoin was trading at something around $18,000, and people were saying that these are crazy amounts of money, we need to do something. That was also the Initial Coin Offering wave, which was, on one hand, interesting that it was possible at all to raise capital that way; on the other hand, a lot of these ICOs turned out to be scams, for lack of a better word. We set out to design a policy framework around this — against a lot of opposition. because people said, “You shouldn’t do this. You’re going to legitimize this crypto activity. This is all a fraud.”