Bybit CEO: MiCA License Alone Insufficient for Profitability in Europe

Securing a Markets in Crypto Assets (MiCA) license is a crucial step for operating in Europe, but it does not guarantee profitability, according to Bybit CEO Ben Zhou. In an interview, Zhou stated that the MiCA license has limitations, as it only covers a portion of the products needed to generate significant revenue, such as derivatives and tokenized assets. To offer these products, companies require a MiFID II license and an Electronic Money Institution (EMI) license. Zhou noted that even with a MiCA license, companies like Bybit are restricted to fiat-to-crypto and crypto-to-crypto transactions, which are not enough to ensure profitability. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still at least two years away from breaking even in Europe. The company's timeline for profitability depends on acquiring the necessary licenses. Zhou views the MiCA license as a long-term investment, acknowledging that smaller crypto firms may struggle to afford the required licenses and comply with regulatory requirements. The upcoming closure of the MiCA grandfathering period is expected to lead to market consolidation, with smaller firms potentially shutting down due to the high costs of compliance and licensing. Zhou also discussed the potential changes to the MiCA framework, including the possibility of increased oversight by the European Securities and Markets Authority (ESMA). Bybit has chosen to work with Austria's FMA regulator, which Zhou believes will pay off in the long run. Regarding the potential for a more centralized regulatory approach, Zhou expressed neutrality, citing both the benefits of a level playing field and the potential drawbacks of increased bureaucracy.