Crypto exchange Coinbase is looking to scale up operations outside the US by acquiring more European licenses.
According to a Coinbase Vice President, Nana Murugesan, the firm is pursuing european licenses in Spain, Italy, France, the Netherlands, and Switzerland. This is in addition to its operations in the United Kingdom, Ireland, and Germany.
While Coinbase is the biggest crypto exchange in the US, it suffers stiff competition from other exchanges like Binance, Crypto.com, and FTX. Recently, both FTX and Binance obtained regulatory approval in Dubai. Even in the US, Coinbase shares crashed to new lows recently after Binance dropped its spot trading fees. The exchange also reported a 27% decline in its 2022 first-quarter revenues due to a drop in trading fees.
The European expansion drive comes even as fears of a crypto winter loom higher. Bitcoin has retested the $20,000 mark severally, sparking fears of a further crash. A further fall in Bitcoin price could potentially pull down general crypto prices.
Already, the market downturn has hit several crypto firms hard. For example, a crypto hedge fund, Three Arrows Capital, plunged into liquidation recently. Several exchanges have also announced varied measures to stay afloat. Earlier in the month, Coinbase had to rescind its employment offers to many people. It also announced an 18% cut in its staff strength amid worsening market conditions.
Bear Market Won’t Affect Planned Expansion
Despite this, Murugesan has affirmed that the firm’s European expansion will go ahead. He noted that the exchange will be hiring for ‘mission-critical roles” even as it pursues European regulatory approval. Murugesan pointed out that the exchange had made such a move in a previous bear market. She said, “When we entered UK and Europe, this was actually during the last big bear market in 2015-2016.”
Meanwhile, Coinbase may obtain its European licenses faster than usual. Officials of the EU are looking to harmonize the regulation of crypto in the continent through the Markets in Crypto-Assets (MiCA) legislation. The officials will meet on Thursday to discuss the specifics of the legislation. If completed MiCA could take effect by 2024.
Once approved, Coinbase will be legally authorized to operate in all 27 member nations of the European Union.
next