Exclusively to CNBC, Coinbase has chosen the Republic of Ireland as its main operational and regulatory center in the European Union. Since 2018, Coinbase has had a base of operations in Dublin, where it presently has 100 workers. If granted approval, Coinbase would have a "MiCA license" in Ireland, permitting it to expand into Germany, France, Italy, the Netherlands, and other EU countries. As it faces regulatory issues in the U.S., Coinbase is hoping to flourish in the European Union—with over 450 million people—and its other global hubs.
Coinbase has informed CNBC in an exclusive interview that Ireland has been chosen as its main operational and regulatory base in the European Union. The company has applied to acquire a license under the EU's Markets in Crypto-Assets (MiCA) regulation, which is slated to come into effect by 2024, via the Central Bank of Ireland. Coinbase has had an office in Dublin since 2018, currently employing roughly 100 individuals. Upon authorization, Coinbase should possess a "MiCA license" in Ireland, allowing the company to easily deliver its services to Germany, France, Italy, the Netherlands, and other EU countries without needing to apply for individual licenses in each. Nana Murugesan, Coinbase's Vice President of International, expressed in an interview earlier this week that the company is confident in their capability to acquire the license and will be ready to integrate it from "day one."
MiCA is the EU's endeavour to establish a unified, interstate regulatory framework for crypto businesses. Its objective is to ensure the safety of investors who buy and sell digital assets such as bitcoin and ethereum. This regulation would enable crypto firms to utilise one license from a single EU country and conduct business in all other member states. It requires stringent adherence to certain principles by crypto entities, specifically exchanges, which specially prohibits them from pooling customer funds with their own resources.
When asked to comment on their decision to choose a member state to operate from, Murugesan said, "We've been deliberating on a few options for some time now and found Ireland to be a highly professional regulator with extensive experience in overseeing financial services along with a deep understanding of our integrated approach to running a business and the untapped potential of this innovative technology." Coinbase has already received authorisation from Ireland as an electronic money institution and virtual asset service provider as well as national registrations in other EU nations including Italy, the Netherlands and Spain.
Headquartered in San Francisco, the company is among the largest crypto trading venues worldwide.
At a time of difficulty for the crypto industry - characterized by declining volumes, and the slowdown of fundraising amidst difficult macroeconomic conditions and heightened regulatory scrutiny - Coinbase has decided to expand their reach into the European Union. The EU's population of 450 million presents a tantalizingly profitable market for the company, which is currently facing a legal dispute with the United States Securities and Exchange Commission (SEC). The SEC has accused Coinbase of operating an illegal securities venue. Paul Grewal, Coinbase's Chief Legal Officer, has commented that while progress towards achieving crypto regulation in the US has been "slower than he'd like," the MiCA offers a more substantial and serious approach to crypto regulation which looks away from jurisdictional fights.
Germany, in particular, is seen as a "talent hub" for Coinbase, with the firm doubling its headcount in the region. The company is taking a measured approach, hoping to tailor their product specifically for the German market, and relying on customer investment to decide which opportunities to pursue. Murugesan of Coinbase expressed his admiration for the German market and the support it has provided..
Murugesan expressed that Coinbase could potentially introduce new offerings in Europe before the U.S., referring to this as a "testbed" for exploring crypto's "utilitarian" purposes such as payments and transactions, as opposed to trading. Seifert, Coinbase's VP of EMEA, highlighted future plans of joining forces with payment providers to make access to digital tokens smooth via Coinbase. Both parties concluded by noting there will be plenty of news to come from the region in the near future. Arjun Kharpal of CNBC also contributed to the report.
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