MiCA License Insufficient for Profitability in Europe, Says Bybit CEO

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 license has limitations, as it does not cover the full range of products required for a company to be profitable, such as derivatives and tokenized assets. To offer these products, companies need to obtain a MiFID II license and an Electronic Money Institution (EMI) license. Zhou explained that with the current MiCA framework, companies can only facilitate fiat-to-crypto and crypto-to-crypto transactions, which is not sufficient for 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, depending on when the firm acquires the necessary licenses. The timeline for profitability is influenced by the acquisition of additional licenses, with Zhou stating that it could take up to five years but is more likely to be within two years. The CEO also predicted market consolidation, as smaller crypto companies may struggle to meet the requirements for MiCA authorization, which is set to close at the end of June. Bybit has chosen to work with a stringent regulator in Austria's FMA, which Zhou believes will pay off in the long run. The interpretation of MiCA varies across countries, with some adopting a more relaxed approach and others opting for heavier regulation. Zhou expressed neutrality regarding the potential involvement of the European Securities and Markets Authority (ESMA) in the regulatory process, citing both advantages and disadvantages to a more centralized approach.