Help Wanted Low Resolution when using PSD Importer and MipMaps

[SOLVED] In the Project Setting under Quality the Quality Level was set to Low. Or more precisely Texture Quality was set to Half Res.

Original Question
I use the PSD Importer to import my Player Character Sprite as a PSB file and when I enable MipMaps, the quality of the sprites gets completely destroyed, as you can see in the screenshot below.



Below a screenshot with MipMaps disabled.


How do I use the PSD Importer with MipMaps, without ruining the sprite's appearance?

I tried to:
- changing the compression mode (None, low, mid, high)
- change Max Texture Size
This does not improve how the sprites look.

Using Unity 2019.4.21f