Coinbase receives MiCA license: revolution on the European crypto market!

Coinbase receives MiCA license: revolution on the European crypto market!

Coinbase recently reached a significant milestone in the European cryptocurrency landscape by receiving a Markets in Crypto-Assets (MiCA) license from Luxembourg's Commission de Surveillance du Secteur Financier. This license allows Coinbase to offer its crypto products throughout the European Union. This move highlights the growing competition in the European crypto market, as other exchanges such as OKX, Crypto.com and Bybit have already received MiCA licenses. Gemini is also working on obtaining a license in the region, further increasing the momentum in the market. Loud Cointelegraph Coinbase chose Luxembourg as its new headquarters in Europe because the country is considered a progressive financial center that has been pushing gradual crypto regulation since 2019.

Luxembourg has adopted four blockchain-related directives in recent years, setting the legal framework for crypto activities in the region. The introduction of the MiCA Regulation, adopted in May 2023 and expected to come into full force in December 2024, will unify the rules for the crypto industry in the EU. An estimated 10-20% of European investors already have some exposure to crypto investments, while 70% of crypto payments are made in retail, particularly in the food and beverage sector.

Regulatory framework and investor protection

The MiCA regulation aims to establish risk-appropriate regulation and increase investor protection. The regulations are intended to create legal certainty for innovations in the area of ​​distributed ledgers and some provisions on asset-referenced crypto assets and e-money tokens (stablecoins) will only begin to apply in July 2024. However, the majority of the regulation will not take effect until early 2025. Supervision is coordinated by European authorities, including BaFin, which are currently preparing technical regulatory and implementing acts and guidelines. Furthermore, providers of crypto assets must submit a white paper that contains essential information about the issuer and the respective crypto asset in order to meet regulatory requirements.

In addition, the MiCA regulation requires authorization for many transactions with crypto assets, which is already a reality in Germany. Providers that have more than 15 million active users are considered “significant providers” and are subject to expanded supervision. To ensure compliance, the European Securities and Markets Authority (ESMA) will maintain a “blacklist” of providers that do not meet MiCA requirements. Another aspect of the new regulation concerns the introduction of a Money Transfer Regulation (TFR), which requires the identification of customers to prevent money laundering. These regulations, including the “Travel Rule”, apply to transactions over 1000 euros to ensure traceability and blocking of suspicious transactions.

Overall, this development shows that the European crypto market is becoming increasingly regulated and standardized, which brings with it both opportunities and challenges for market participants. Investors benefit from stronger protection and a clear legal framework, while providers have to adapt to the new guidelines.