Bybit CEO: MiCA License Alone Insufficient for Profitability in Europe

Securing a Markets in Crypto Assets license is a crucial step for operating in Europe, but it is not enough to guarantee profitability, according to Bybit's 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 a company to be profitable. To offer these products, companies need to obtain additional licenses, including a MiFID II license and an Electronic Money Institution license. Zhou explained that with the current MiCA framework, companies can only facilitate fiat-to-crypto and crypto-to-crypto transactions, which is not enough to sustain a profitable business. Even large companies like Bybit, which is the world's second-largest cryptocurrency exchange by trading volume, are not yet profitable in Europe and are still in the process of acquiring the necessary licenses. Zhou estimates that it may take around two years for Bybit to become profitable in Europe. The CEO also predicts that the crypto market in Europe will experience consolidation, as smaller companies may struggle to meet the regulatory requirements and obtain the necessary licenses. The MiCA grandfathering period is set to end in June, and companies must obtain MiCA authorization to operate across the region by July 1. Zhou believes that this deadline will be a turning point for many small to medium-sized crypto companies in Europe, as they will be forced to either comply with the regulations or shut down. The regulatory landscape in Europe is constantly evolving, with some countries calling for stricter regulations and increased oversight. Zhou stated that Bybit has chosen to work with a stringent regulator in Austria, which will pay off in the long run. The company remains neutral on the topic of bringing the European Securities and Markets Authority into the mix, as it could lead to both advantages and disadvantages.