Bybit CEO Claims MiCA License Alone Insufficient for Profitability in Europe

Securing a Markets in Crypto Assets license is a crucial step for operating in Europe, but Bybit's CEO, Ben Zhou, emphasizes that it is not enough on its own to achieve profitability. In an interview, Zhou explained that the MiCA license has limitations, as it does not cover the full spectrum of products necessary for a company to be profitable, such as derivatives and tokenized assets. To offer these products, companies require additional licenses, including a MiFID II license and an Electronic Money Institution license. Zhou noted that even with a MiCA license, companies can only facilitate fiat-to-crypto and crypto-to-crypto transactions, which is not sufficient for a profitable business. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still some way off from breaking even in Europe, with Zhou estimating that it could take around two years. The timeline is dependent on when the company acquires the necessary licenses. Zhou views the current MiCA license as a long-term investment for Bybit, but acknowledges that smaller companies may struggle to afford the costs associated with compliance and licensing. The closure of the MiCA grandfathering period at the end of June is expected to lead to market consolidation, with many small to medium-sized crypto companies likely to shut down due to the high costs and regulatory requirements. Zhou believes that this consolidation is inevitable, given the need for companies to invest heavily in compliance infrastructure to be profitable. The MiCA framework is also undergoing changes, with some regulators calling for stricter 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. However, he is neutral on the idea of bringing in the European Securities and Markets Authority to oversee the industry, citing concerns about increased bureaucracy and decreased efficiency.