Bybit CEO: MiCA License Alone Insufficient for Profitability in Europe

Securing a Markets in Crypto Assets (MiCA) license is a crucial step for cryptocurrency trading platforms to operate in Europe, but it is not enough on its own to guarantee profitability, according to Bybit CEO Ben Zhou. The MiCA framework has limitations, as it does not cover a wide range of products such as derivatives and tokenized assets that are necessary for a company to be profitable. To offer these products, companies need to obtain additional licenses, including a MiFID II (Markets in Financial Instruments Directive) license and an Electronic Money Institution (EMI) license. Zhou explained that with the current MiCA framework, companies can only engage in fiat-to-crypto and crypto-to-crypto transactions, which are not enough to sustain a profitable business. Even Bybit, the world's second-largest cryptocurrency exchange by trading volume, is not expected to break even in Europe for at least two years, as it still needs to acquire the necessary licenses. The company views its MiCA license as a long-term investment, and Zhou believes that market consolidation is inevitable, especially with the MiCA grandfathering period coming to an end. This period's closure is expected to lead to the demise of many smaller crypto firms that are unable to meet the regulatory requirements. Zhou also noted that the interpretation of MiCA varies across different countries, with some having stricter regulations than others. Bybit has chosen to work with Austria's FMA, a stringent regulator, which Zhou believes will pay off in the long run. The company remains neutral on the potential involvement of the European Securities and Markets Authority (ESMA) in the regulation of crypto assets, citing both potential benefits and drawbacks.