Bybit CEO: MiCA License Insufficient for Profitability in Europe

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 a wide range of products such as derivatives and tokenized assets, which are essential for generating significant revenue. To overcome these limitations, companies must also obtain a MiFID II license and an Electronic Money Institution (EMI) license. Zhou emphasized that even with a MiCA license, companies like Bybit can only engage in fiat-to-crypto and crypto-to-crypto transactions, which is not enough to achieve profitability. The CEO noted that Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still far from breaking even in Europe and that the timeline for achieving this goal depends on acquiring the necessary licenses. Zhou estimated that it may take around two years for the company to become profitable in the region. The current market landscape is critical for small to medium-sized crypto companies in Europe, as the MiCA grandfathering period is set to end soon, and firms must obtain MiCA authorization to operate across the region. This deadline is expected to lead to market consolidation, with many smaller crypto firms shutting down due to the inability to afford the necessary licenses and compliance infrastructure. The regulatory environment is also evolving, with some country regulators pushing for tighter control and increased oversight. Zhou stated that Bybit chose to work with a stringent regulator in Austria's FMA, which will pay off in the long run. The CEO also expressed neutrality regarding the potential involvement of the European Securities and Markets Authority (ESMA) in the regulatory process, citing both potential advantages and disadvantages of a more centralized approach.