Exclusively telling CNBC, Coinbase--a cryptocurrency exchange--has decided on Ireland as its main operational and regulatory center in the European Union. Since 2018, it has had an office in Dublin and now employs around 100 people there. If approved, Coinbase shall be given an all-encompassing "MiCA license" in Ireland, which will allow it to extend its services over to Germany, France, Italy, the Netherlands and other EU countries. Even with regulatory issues growing in its homeland, Coinbase remains positive about its prospects within the EU--a continent with a large population of 450 million.
Coinbase has chosen Ireland as its major EU operational and regulatory base, an exclusive CNBC interview revealed. The company has applied for a license from the Central Bank of Ireland under the incoming EU Markets in Crypto-Assets (MiCA) regulation, which is set to be implemented in 2024. Coinbase has had a presence in Dublin since 2018 and now employs around 100 people. A MiCA license in Ireland, if approved, would enable it to "passport" services into Germany, France, Italy, and the Netherlands without needing to apply for individual licenses. Coinbase VP of International Nana Murugesan is confident the license will be granted and that the company will be active with it from day one.
The EU has launched MiCA, a pan-European regulatory framework for crypto companies, in an effort to protect investors involved in buying and selling crypto assets, such as bitcoin and ethereum. The regulation permits crypto companies to use one license in one country to operate in all 27 EU member states, and imposes specific requirements on these businesses, particularly exchanges, like not using client funds with their own assets. Coinbase's Murugesan commented on the process of choosing a member state for the company, "It was really important for us to choose a member state that is not only a sophisticated regulator with extensive experience regulating financial services, but also recognises the importance of having an international business model, the way we are structured, and the potential of innovative new technology." Currently, Coinbase holds various licenses and registrations in the EU countries such as Ireland, Germany, Italy, the Netherlands, and Spain.
Headquartered in San Francisco, the company is one of the biggest crypto trading venues worldwide.
Despite a challenging macroeconomic environment and rising regulatory pressure, Coinbase is expanding in the European Union. With a total population of 450 million and real crypto regulations, the continent could provide significant growth opportunities for the crypto company. Paul Grewal, Coinbase's chief legal officer, said that progress toward formal crypto legislation in the U.S. has been "slower" than he'd like. But Coinbase is hopeful for more regulatory clarity in the future. According to Chainalysis data, Central, Northern, and Western Europe is the second-biggest crypto economy in the world, and Coinbase expects lots of growth in the region. Additionally, Coinbase has chosen Germany as its regional "talent hub" and will hire locally to tailor its product to the country. Murugesan told CNBC that their German operation has more than doubled in headcount.
Coinbase may try launching new products in Europe first before expanding into the U.S., Murugesan stated. With the support of MiCA, it gives the company the chance to explore ways to implement crypto for daily activities, such as payments and transactions, as opposed to just trading, he informed CNBC. “It enables us to be inventive,” he added. “And we can anticipate that a few of these daily use cases will be initiated in the EU first.” Daniel Seifert, Vice President of EMEA for Coinbase, revealed that the business is aiming to connect with other payment suppliers to make it simpler for clients to obtain digital tokens through Coinbase. “There are numerous interesting plans for the region that we’ll observe in the upcoming weeks and months,” Seifert said.---CNBC's Arjun Kharpal made contributions to this report.
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