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 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 necessary for a company to be profitable. To offer these products, companies require 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 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 timeline for profitability depends on obtaining these licenses. According to Zhou, the company can afford to operate at a loss due to its large size, but smaller companies may struggle to survive. The CEO predicts market consolidation, as smaller companies may be forced to shut down due to the inability to afford the necessary licenses and compliance infrastructure. The MiCA license allows a crypto-asset service provider to operate across the European Economic Area, but the grandfathering period is coming to an end, and companies must obtain MiCA authorization by July 1. Zhou believes that this deadline will lead to market consolidation, as smaller companies may not be able to afford the necessary investments. The MiCA regulations are also undergoing changes, with some regulators calling for tighter control and increased oversight. Bybit has chosen to work with a stringent regulator in Austria, which Zhou believes will pay off in the long run. The company remains neutral on the topic of bringing in the European Securities and Markets Authority to oversee the industry.