Bybit CEO: MiCA License Alone Insufficient for Profitability in Europe

Acquiring a Markets in Crypto Assets license is a crucial step for operating in Europe, but according to Bybit CEO Ben Zhou, it is not enough to guarantee profitability. The MiCA license has limitations, as it does not cover a wide range of products such as derivatives and tokenized assets, which are essential for generating revenue. To overcome these limitations, companies need to obtain additional licenses, including MiFID II and Electronic Money Institution licenses. Zhou explained that even with a MiCA license, companies can only facilitate fiat-to-crypto and crypto-to-crypto transactions, which restricts their ability to operate a profitable business. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still far from breaking even in Europe and is relying on its large size to afford the investment. The company expects to become profitable within two years, depending on when it acquires the necessary licenses. The MiCA license allows crypto-asset service providers to operate across the European Economic Area, but the upcoming deadline for the MiCA grandfathering period is expected to lead to market consolidation, with many small to medium-sized crypto companies struggling to comply with the regulations. Zhou predicts that the industry will experience significant changes, with some companies shutting down due to the high costs of compliance and investment in infrastructure. The MiCA regulations are also undergoing changes, with some country regulators pushing 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. The company remains neutral on the potential introduction of a more centralized regulatory body, such as the European Securities and Markets Authority, citing concerns about increased bureaucracy and decreased efficiency.