MiCA. The very name of it is a return to the bureaucratic nightmare. For artists and everyday users in Southeast Asia, that’s what it risks becoming—precisely because it has been so successful. Meanwhile, the EU is busy patting itself on the back for “regulating crypto.” In doing so, it is unwittingly putting at risk a hotbed of digital innovation and promise for expanding financial inclusion. This is more than just dollars on a balance sheet. It hurts innovation, restricts various opportunities, and eventually upholds the inequities that crypto was originally designed to break down.
Is Europe Exporting Financial Exclusion
Consider the dynamic arts scene booming throughout Southeast Asia. Musicians are turning to NFTs to avoid record labels that want a big cut. This facilitates a closer connection with audiences across the globe and helps them get paid fairly for their art. These relatively new platforms are democratizing them to mint their digital art, sell it directly to buyers, and retain ownership in new ways that weren’t possible before.
Now, imagine that tap being shut off. MiCA’s strict regulations, especially those targeting stablecoins such as USDT, risk pushing them out of Europe’s exchanges. As Tether’s CEO, Paolo Ardoino, puts it, MiCA is “very dangerous” on the whole. Tether has a 3x $149 billion market cap and $120 billion in US Treasuries. Otherwise, if they conclude that compliance is unachievable, it sends a dangerous signal to more nimble stablecoin startups that could foster SEA artists.
This isn't some abstract economic theory. Artists in the Philippines, Indonesia, and Vietnam are leveraging crypto to bypass shattered banking infrastructures. This new approach enables them to enter new international markets. And they’re not gambling with a portion of their savings on meme coins, they’re creating sustainable livelihoods.
Consider this: a weaver in rural Cambodia, using a crypto-based platform to sell her intricate textiles directly to buyers in Europe and North America. MiCA’s strict rules on stablecoins would make a lot of transactions prohibitively expensive. Otherwise this could very well send her straight back into the arms of predatory third-party intermediaries. Is that really the future Europe wants to build? A future where financial innovation is reserved for those who already have access to traditional banking, while the developing world is left behind?
Stablecoins Lifeline, Not Just Speculation
To many in SEA, stablecoins aren’t simply speculative investment vehicles, they’re a necessity. For millions of families, remittances are their single most important source of income and critical to their survival. Current remittance services have typically high transaction fees, further draining the limited incomes of migrants abroad. Stablecoins provide a quicker, less expensive, and more open alternative.
MiCA's potential to limit access to USDT, a widely used stablecoin, due to its non-compliance, is a direct hit to these vulnerable populations. It’s the equivalent of levying a regressive tax on the most vulnerable, under the guise of “protecting” them. And what about the unbanked? Millions of people throughout SEA do not have adequate access to basic financial services. For them, stablecoins provide greater access— a new form of savings and immediate money transfers, a stake in the digital economy — outside the traditional banking system.
MiCA's one-size-fits-all approach ignores these realities. It's a regulatory hammer trying to crack a nut, and in the process, it's crushing the hopes and dreams of millions who are just trying to build a better life. This is not consumer protection—this is consumer choice restriction and marketplace rigging to protect and entrench the status quo.
Cultural Censorship Via Financial Control
Beyond this economic threat, MiCA is a threat to cultural expression. The rapid emergence of NFTs has been a game changer for artists across Southeast Asia. Today, they get to tell their stories, traditions, and unique perspectives to a global audience. These digital assets are more than highly sought after limited-edition collectibles. They protect cultural heritage and promote intercultural communication.
Take the case of a young Myanmar filmmaker, for example, who uses NFTs to raise funds for her documentary chronicling her war-torn community’s fight against tyranny. MiCA’s restrictions on crypto would raise the cost of capital for her, thus muting what is left of her voice. It’s cultural censorship in the guise of fiscal conservatism.
Ardoino’s fear that MiCA might be an insidious plan to restrict spending via the digital euro (CBDC) is particularly alarming. This raises an alarming scenario in which governments could have unprecedented power over our money. They could control what we’re allowed to purchase, market, and produce.
We need to ask ourselves: are we willing to sacrifice financial freedom and cultural expression on the altar of regulatory certainty? For an answer, particularly from those of us who appreciate the benefits of innovation and inclusivity, the answer needs to be a loud and clear no.
The answer? Push for purpose-built regulatory structures, ones that account for and celebrate the distinct needs of emerging markets. Back efforts to increase crypto awareness and adoption across SEA. Insist that federal regulators enter into meaningful consultation with the water operators and the people. Together, this collaborative can ensure we craft the right balance of regulation to both support innovation and spur positive change. The hopes of SEA artists, users, and their dreams ride on it.
