The European Union's recent adoption of the Markets in Crypto-Assets Regulation (MiCA) into law represents a huge, and foolish, step in how Europe approaches the regulation of crypto. Given recent regulatory actions by the Securities and Exchange Commission (SEC) aimed at crypto exchanges in the United States, many are wondering what effect, if any, MiCA will have on the crypto ecosystem in the U.S. and worldwide. How will it change financial innovation in Europe? Will a similar framework be adopted elsewhere?
MiCA makes two mistakes at once. It undermines the privacy of E.U. residents while triggering a departure of financial technology talent from Europe to other jurisdictions—most likely Hong Kong, El Salvador, and the United States.
