Bybit CEO: MiCA License Alone Insufficient for Profitability in Europe

Securing a Markets in Crypto Assets license is a crucial step for cryptocurrency trading platforms to operate in Europe, but it is not enough on its own to guarantee profitability, according to Bybit CEO Ben Zhou. In an interview, Zhou explained that the MiCA license has limitations, as it does not cover the full range of products necessary for a company to be profitable, such as derivatives and tokenized assets. To offer these products, companies also need to obtain a MiFID II license and an Electronic Money Institution license. Zhou noted that even with a MiCA license, companies can only engage in fiat-to-crypto and crypto-to-crypto transactions, which is not enough to sustain a profitable business. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still at least two years away from breaking even in Europe, according to Zhou. The company's timeline for profitability depends on when it acquires the additional licenses it needs. Zhou stated that the current MiCA framework is not sufficient for companies to make a profit, unless they have multiple licenses like larger companies such as Kraken or Bitpanda. The CEO believes that market consolidation is inevitable, particularly with the MiCA grandfathering period set to end in June, which will force many small to medium-sized crypto companies to either obtain MiCA authorization or cease operations. Zhou also mentioned that MiCA is undergoing changes, 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. Regarding the potential involvement of the European Securities and Markets Authority, Zhou expressed neutrality, citing both potential advantages and disadvantages.