Talking with Eva Kaili, VP of the European Parliament, on MiCA regulation

In an article I wrote for Cointelegraph, I commented on how the European Union has moved forward to regulate the crypto-asset market through Markets in Crypto-Assets (MiCA) and Transfer of Funds Regulation (ToFR). With this subject as a background, I had the privilege of interviewing one of the people who knows the most about regulating new technologies: Eva Kaili, vice president of the European Parliament. She has been working hard on promoting innovation as a driving force for the establishment of the European Digital Single Market. 

Check out the interview below, which covered key points about MiCA, some proposed legislative provisions proving to be more controversial than others, such as decentralized finance (DeFi) remaining out of scope, rules administered through self-executing smart contracts (Lex Cryptographia), decentralized autonomous organizations (DAOs) and more.

1 — Your work in promoting innovation as a driving force for the establishment of the European Digital Single Market has been intense. You have been a rapporteur for several bills in the areas of blockchain technology, online platforms, Big Data, fintech, AI and cybersecurity. What are the main challenges legislators face when introducing bills involving new technologies?

Technology develops rapidly, and innovative solutions need some space to be tested and developed. Then, policymakers need some time to understand how these technologies have been shaped, consult with stakeholders, and measure the expected impact on traditional markets. So, the optimal way forward is not to immediately respond to any technological development with a legislative initiative but rather to provide time to the technology to develop and to the policymakers to educate themselves, comprehend the benefits and challenges of innovative technologies, digest how they are supposed to affect the current market architecture and, then, suggest a balanced, tech-neutral and forward-looking legislative framework. To this end, in Europe, we adopt a “wait and see” approach, which leads us to safely proceed by answering three fundamental questions: (1) how early should the technological development be regulated? (2) how much detail should the proposed regulation include? and (3) how broad should the scope be?

In this context, new challenges may arise, amongst which to decide whether to use old rules to new instruments or to create new rules to new instruments. The former is not always viable and may have unintended…