Two of the world's largest cryptocurrency players are preparing to obtain licenses to operate throughout the European Union under the new MiCA regulation, even amid a deepening rift between national regulators regarding the speed and quality of approval of such permits, sources familiar with the negotiations report reports Reuters, writes UNN.
Two leading cryptocurrency companies in the world are expected to receive licenses in the near future that will allow them to operate in all 27 countries of the European Union. This is happening against the background of acute disputes between European regulators regarding the speed and thoroughness with which such permits should be granted.
New opportunities have emerged thanks to the EU Regulation on Crypto-Asset Markets (MiCA), which came into force this year. It allows member states to issue licenses that open the door for crypto companies to the entire European market. However, according to informants, "some states have expressed concern in closed meetings about the too rapid issuance of permits in a number of countries."
At stake is control over the crypto industry, the value of which has reached trillions of dollars. Regulators have repeatedly warned that without proper oversight, the market could become a tool for fraud, market fluctuations, and illegal financial flows.
MiCA aims to integrate the crypto market into the traditional financial regulatory system. But too different approaches of countries can nullify the entire reform.
Conflict over the speed of obtaining permits
According to sources, the crypto trading platform Gemini, founded by billionaires Tyler and Cameron Winklevoss, is "close to obtaining a license in Malta - the smallest country in the EU." Prior to this, Malta had already quickly approved applications from OKX and Crypto.com, which caused concern among European regulators.
The French regulator AMF has publicly warned that the lack of centralized powers in ESMA could lead to countries competing to be less demanding of companies.
"Regulatory race to the bottom," - this is how the situation was described in the French agency.
Another official also expressed concern that licenses could be issued by countries with a limited staff of regulators - for example, Malta.
At the same time, the Maltese regulator defends its approach. The agency noted that they have already issued four crypto licenses and were able to act quickly thanks to experience.
Accelerated processing was due to a deep understanding gained over the years
ESMA is refraining from commenting for the time being, although a review of the Maltese process has already been carried out - the report is expected in the near future.
OKX emphasized that their application was "thorough" and compliance is a priority.
Meanwhile, Coinbase is expected to receive a license from Luxembourg. This will be the first American crypto company in the S&P 500 to go through the MiCA procedure in Europe. Although the process has been going on for several months, the source emphasizes: the scope of Coinbase's activities in Luxembourg will be modest.
A company spokesman said that 200 employees are already working in Europe and it is planned to hire more than 20 more in Luxembourg by the end of the year. He added that the country is a "highly respected, reputable global financial center."
The financial regulator of Luxembourg does not comment on the situation, but a person familiar with the matter believes that criticism of the country is biased.
Some critics are rather motivated by selfishness in the race to attract cryptocurrency companies
Coinbase's success in Luxembourg could be a blow to Ireland, which has recently cooled to cryptocurrencies. Back in 2023, the head of the Central Bank of Ireland, Gabriel Mahluf, stated that cryptocurrency is "mostly a game of chance where you actually lose", comparing it to a Ponzi scheme.
Currently, the global cryptocurrency market is estimated at about $3.3 trillion, despite high-profile scandals, such as the collapse of FTX in 2022.
At the same time, disputes are ongoing in Brussels as to whether ESMA's powers should be expanded. The head of the agency, Verena Ross, openly advocates for increased control. But, according to a source, some countries are "skeptical of this idea."