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Coinbase picks Ireland as Europe hub after hunt for ‘trusted’ regulator

Coinbase picks Ireland as Europe hub after hunt for ‘trusted’ regulator
Regulation
Coinbase co-founder and CEO Brian Armstrong will see the crypto exchange licenced in Ireland to access the EU market in 2024. Credit: Andrés Núñez/DL News
  • Coinbase expands its EU strategy as it faces pressure from US regulators.
  • Dublin will be the crypto exchange giant’s EU foothold under MiCA, the bloc’s landmark regulation.
  • The move will enable the exchange to tap into the $17 trillion market.
  • The announcement comes after Coinbase commented on its hunt for a “trusted” EU regulator in September.

Coinbase has picked Ireland as an access point to the European Union’s 450 million population ahead of new crypto laws going live in 2024.

“Ireland has a supportive political environment for fintech companies, as well as a globally respected regulator,” said Daniel Seifert, Coinbase vice president and regional EMEA managing director.

The Markets in Crypto-Assets regulation means that firms targeting Europeans can pick a licence from one EU member state.

Then, they can passport the licence across the 27 countries in the bloc, enabling them to tap into a market that had a collective GDP worth about $17 trillion in 2022.

“We want to have a regulator that we think is a trusted and a tier-one regulator,” Tom Duff Gordon, Coinbase’s vice president of international policy, told an event in Brussels in September. “We want to have access to talent.”

Coinbase is one of the largest crypto exchanges in the world, with a trading volume of around $630 million in the last 24 hours at the time of publishing.

The move comes as Coinbase and other market players have criticised what they view as a hostile environment in the US where the Securities and Exchange Commission in particular has fired off a barrage of enforcement actions against crypto companies this year.

The move also highlights the growing competition between EU countries to woo crypto firms to set up shop with them.

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Competition between countries

As the clock ticks down for the MiCA rulebook to kick in, some European countries are battling to win over crypto firms to pick their country as the regional hub.

France, which is frontrunning the EU with its own set of MiCA-like laws, has attracted big crypto players like Circle and OKX to have Paris as its headquarters.

Malta is also looking to put in place new laws to help firms transition to MiCA ahead of time.

Czechia, which DL News found to have the largest number of crypto legal entities registered by miles, has legal firms offering services to help crypto service providers adapt in an effort to retain the local web3 hub.

But Ireland has long drawn in tech behemoths and hosts the likes of Google, Meta and Apple.

Ireland’s low corporate tax rate of 12.5% has successfully attracted the world’s biggest multinationals. Plus, the country has a young workforce with high education rates.

Coinbase has had a foot in Ireland since 2018, and has been registered with the Central Bank of Ireland since 2022.

“Due to our existing operational structure in Ireland, we have access to deep talent pools with significant expertise in both financial services and innovative new technologies,” Seifert said.

Irish authorities are also pleased with “Coinbase’s continued commitment to Ireland,” Jennifer Carroll MacNeill, Minister of State at the Department of Finance, said.

The Irish Central Bank will be responsible for overseeing firms like Coinbase under MiCA.

The central bank is already taking stock and has “established a cross-sectoral team to integrate” the regulation with its supervisory and authorisation systems, according to its website.

Meanwhile, Coinbase is tied up with legal woes in the US. The SEC charged Coinbase in June with allegedly operating an illegal exchange and providing investors with unregistered securities.

“The SEC has taken a regulation by enforcement approach that is harming America,” Brian Armstrong, Coinbase co-founder and CEO, wrote on X at the time.

Binance, Ripple and many other firms are also facing legal woes against regulators.

The lack of regulatory clarity and aggressive enforcement from supervisors may push big crypto actors to push more resources into Europe, some market watchers warn.

“There are a lot of players looking to Europe now because they are desperate for regulatory clarity and to know where they stand,” Erwin Voloder, head of policy at the European Blockchain Association, recently told DL News. The longer the hostile environment endures in the US, “the more momentum shifts.”

Have a tip about crypto regulation in Europe? Contact the author at inbar@dlnews.com