Coinbase and Gemini, major cryptocurrency exchanges, are on the verge of obtaining licenses to operate in Europe under a new regulatory framework.
Expansion of Coinbase and Gemini in Europe
According to recent reports, Coinbase and Gemini are close to securing regulatory licenses to operate across the European Union under the newly implemented Markets in Crypto-Assets (MiCA) framework. This event confirms the growing interest in Europe's clearer regulatory environment.
Gemini is anticipated to receive approval from Malta, while Coinbase's license will come through Luxembourg, a favored jurisdiction due to its strong regulatory reputation for fintech firms. If granted, these platforms will join other exchanges like Bybit and Binance that have already established a foothold in the EU.
Stablecoin Regulation Sparks Controversy
MiCA, which came into effect in June 2024, requires stablecoin issuers to hold a 'significant' portion of their reserves in European banks. This provision has faced criticism within the industry. For instance, Tether, the issuer of the largest stablecoin, has opted out of compliance with the new rules, while several others, including Circle's USD Coin, have received approval.
Some experts point out that despite the creation of a unified regulatory framework, demand for stablecoins in Europe remains low. Instead, there is an increasing need for custodial and trading services, areas where Coinbase and Gemini may succeed.
Coinbase Faces Backlash Over US Army Parade Sponsorship
Coinbase has come under heavy criticism from the crypto community following its sponsorship of the US Army's 250th anniversary parade. Many within the community expressed displeasure, viewing the move as contradictory to the core values of decentralization. Notably, critic Adam Cochran announced his intention to exit all his positions in Coinbase, highlighting the discontent among users.
This situation raises questions about the company's ability to remain politically neutral while engaging with governmental and military entities.
The expansion of Coinbase and Gemini in Europe and their positioning in light of new regulatory norms highlights the changing landscape of the cryptocurrency market. However, the companies also face challenges regarding public reaction and the need to uphold their values amidst increasing pressures from political and governmental stakeholders.
