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 is not enough 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, which are essential for a company to be profitable. Zhou emphasized that companies need to obtain additional licenses, including a MiFID II (Markets in Financial Instruments Directive) license and an Electronic Money Institution (EMI) license, to operate a profitable business in Europe. 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 awaits the acquisition of the necessary licenses. The current MiCA license only allows for fiat-to-crypto and crypto-to-crypto transactions, which is not sufficient for a company to turn a profit. Zhou believes that market consolidation is inevitable, particularly with the MiCA grandfathering period coming to an end, which will lead to the closure of many small to medium-sized crypto companies in Europe. The regulatory landscape is also evolving, with some country regulators pushing for stricter control and increased oversight, which may impact the profitability of crypto companies. Bybit has chosen to work with a stringent regulator in Austria's FMA, which Zhou believes will pay off in the long run. However, the involvement of the European Securities and Markets Authority (ESMA) may bring both advantages and disadvantages, as it could create a more level playing field but also increase bureaucracy and decrease efficiency.