Bybit CEO: MiCA License Alone Insufficient for Profitability in Europe

Acquiring 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 current MiCA framework 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 need to obtain additional licenses, including a MiFID II license and an Electronic Money Institution (EMI) license. Zhou explained that with the current MiCA license, 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 CEO views the MiCA license as a long-term investment, acknowledging that the company can afford it due to its size. The upcoming closure of the MiCA grandfathering period at the end of June is expected to lead to market consolidation, as smaller crypto companies may struggle to obtain the required authorization to operate across the region. Zhou anticipates that many of these companies will shut down due to the significant investment required to comply with the regulations and obtain the necessary licenses. The MiCA regulations are also subject to change, with some regulators pushing for stricter control and increased oversight. 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 regulatory process.