Bybit CEO: MiCA License Alone Insufficient for Profitability in Europe

Acquiring a Markets in Crypto Assets (MiCA) license is a crucial step for operating in Europe, but it is not enough to guarantee profitability, according to Bybit CEO Ben Zhou. The MiCA license has limitations, as it does not cover a wide range of products such as derivatives and tokenized assets, which are essential for generating significant revenue. To offer these products, companies need to obtain additional licenses, including a MiFID II license and an Electronic Money Institution (EMI) license. Zhou explained that even with a MiCA license, companies can only facilitate fiat-to-crypto and crypto-to-crypto transactions, which is not enough to sustain a profitable business. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still far from breaking even in Europe and is relying on its large size to absorb the costs. The company is working to acquire the necessary licenses, but the timeline for achieving profitability is uncertain, with estimates ranging from two to five years. The upcoming deadline for the MiCA grandfathering period is expected to lead to market consolidation, as smaller crypto companies may struggle to meet the regulatory requirements. Zhou noted that Bybit chose to work with a stringent regulator in Austria, which will pay off in the long run, but expressed concerns about the potential centralization of regulation and the involvement of the European Securities and Markets Authority (ESMA).