Gemini and Coinbase Set to Dominate EU Market with MiCA Licenses
Gemini and Coinbase eye EU growth under new MiCA policies. Gemini’s Malta approval, Coinbase’s Luxembourg filing raise regulatory issues. Professionals advise consistent guidelines to safeguard EU crypto market stability. The European Union is on the verge of a significant shift in the digital financing landscape. Two major crypto firms, Gemini and Coinbase, among others, are preparing to scale their operations across the 27 countries of the EU single market due to the new Markets in Crypto-Assets (MiCA) regulation. However, not everyone is happy with this turn of events.
Coinbase Applies via Luxembourg, Gemini Set for Malta Approval
According to Reuters, both companies are likely to receive licenses in different EU nations. Gemini is expected to be approved in Malta, while Coinbase has applied in Luxembourg. These countries are known for their crypto-friendly policies and efficient regulation processes. While this may seem like good news for the crypto industry, it has raised concerns among financial regulators.
Malta’s fast licensing process has sparked controversy. The country previously granted operational licenses to OKX and Crypto.com, among others, shortly after the launch of MiCA. The Malta Financial Services Authority attributes this speed to years of experience in the crypto field, but not everyone agrees. Critics argue that speed may come at the expense of thorough scrutiny.
On the other hand, Luxembourg, where Coinbase has also applied, is considered a jurisdiction friendly to crypto businesses. The application process has been longer, but Coinbase already has a significant presence in Europe, employing around 200 people on the continent. There is uncertainty regarding Coinbase’s licensing timeline as the company has not provided updates.
This situation has raised concerns among regulators in the EU. The European Securities and Markets Authority (ESMA) is monitoring activities in Malta closely and will soon release a report on the licensing processes in the country. The French financial authority has gone a step further to caution against what it terms as a regulatory race to the bottom.
Coinbase, Gemini Move Raises Regulatory Questions in Europe
MiCA was introduced to harmonize crypto regulation across the EU, aiming to provide crypto assets with similar supervision as traditional financial products. However, when licenses are issued rapidly without thorough vetting, the entire system could be compromised.
Bybit received a MiCA license in Austria in February, becoming one of the first crypto companies to obtain such approval. While this demonstrates progress can be made within regulatory frameworks, it underscores the need for consistent enforcement.
An anonymous senior European regulator expressed concerns about countries with limited regulatory staff granting licenses too liberally. Such actions may pose risks to the financial system due to less stringent reviews.
Gemini and Coinbase’s entry into the EU market promotes crypto adoption, yet regulatory challenges persist. Harmonized standards across EU countries are essential to maintain transparency and trust. Without this, the goals of MiCA could be jeopardized.
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