Introduction:
The European Union’s crypto landscape is undergoing a massive transformation as two of the world’s largest cryptocurrency exchanges — Coinbase and Gemini — gear up to secure licenses under the EU’s new Markets in Crypto-Assets (MiCA) regulation. This landmark development is poised to revolutionize digital finance in the region, enabling approved crypto firms to legally operate across all 27 EU member states with a single license. However, as progress accelerates, concerns over uneven regulatory standards and fast-tracked approvals are creating friction among EU regulators.
MiCA Regulation: A New Era for Crypto in the EU
The Markets in Crypto-Assets (MiCA) regulation officially came into effect earlier this year, marking a crucial step toward comprehensive oversight of the cryptocurrency industry in Europe. Designed to align crypto with traditional financial frameworks, MiCA aims to combat fraud, prevent financial instability, and curb illicit activities like money laundering.
Under the regulation, any EU member state can issue licenses to crypto firms, granting them the ability to operate seamlessly across the European bloc. This "passporting" approach is expected to streamline operations for global exchanges while providing consistent consumer protections. But the road to full compliance has not been entirely smooth
Internal Disputes Emerge Among EU Regulators
As countries begin rolling out their licensing procedures under MiCA, differences in pace and enforcement standards are creating tensions within the regulatory community. Insiders familiar with the discussions report growing unease among regulators over what they see as inconsistent application of rules across the EU.
Two sources, who requested anonymity, highlighted that some jurisdictions are approving licenses much faster than others, raising fears of a “regulatory race to the bottom.” The concern is that some smaller nations may prioritize speed and economic incentives over rigorous compliance, potentially undermining the overall goals of MiCA
Malta’s Fast-Track Approach Draws Scrutiny
One country at the center of this regulatory controversy is Malta, the smallest member of the EU. Malta’s expedited approval process has allowed it to issue licenses to multiple crypto exchanges, including OKX, Crypto.com, and now Gemini, the U.S.-based exchange founded by Cameron and Tyler Winklevoss.
Despite assurances from the Malta Financial Services Authority (MFSA) that its licensing process is both rigorous and compliant with EU anti-money laundering standards, other national regulators remain skeptical. The French Financial Markets Authority (AMF) has reportedly raised concerns within the European Securities and Markets Authority (ESMA), warning that inconsistent oversight could jeopardize MiCA’s objectives.
A senior regulatory official pointed out that countries with fewer regulatory staff, like Malta, might not be fully equipped to maintain long-term compliance enforcement. ESMA is currently reviewing Malta’s processes and is expected to release a report on its findings.
Gemini Sets Up Shop in Malta
Gemini’s choice of Malta as its European base is strategic. Given the country's track record of quick approvals and its proactive stance toward crypto innovation, Malta offers an appealing entry point into the EU market.
While some criticize Malta for moving too fast, others argue that the country’s agility stems from years of experience in digital finance and blockchain regulation. The MFSA claims it currently oversees four licensed crypto firms and maintains one of the strictest financial compliance systems in Europe.
Gemini’s Malta expansion positions it to provide trading services across Europe, in line with MiCA’s passporting mechanism. This move underscores the increasing competition among EU nations to attract crypto business under the new regulatory framework.
Coinbase Closes in on Luxembourg License
While Gemini eyes Malta, Coinbase is preparing to secure a license in Luxembourg — another influential financial hub within the EU. According to insiders, Coinbase’s application has been in progress for several months, and approval appears imminent.
Although the initial size of Coinbase’s operations in Luxembourg is described as “relatively small,” the strategic importance is significant. The company formed a local entity, Coinbase Luxembourg SA, in late 2024, with a share capital of €30,000. It is currently led by four directors, including senior executives from Coinbase’s U.S. headquarters.
Coinbase has also announced plans to expand its European workforce by at least 20 additional positions this year, building on its existing 200-strong employee base across the continent. Securing a Luxembourg license will allow Coinbase to further penetrate the European market and offer a broader range of crypto services within the MiCA framework.
Regulatory Oversight: Balancing Speed and Security
As MiCA continues to reshape the European crypto market, the debate over enforcement consistency and regulatory responsibility is intensifying. While faster approvals may encourage innovation and growth, they also raise the risk of regulatory arbitrage — where firms shop for the most lenient regimes.
The European Securities and Markets Authority (ESMA), though influential, lacks the direct power to override national regulators, leading to fragmented approaches. This has prompted calls for stronger central oversight and clearer guidelines to ensure that all licenses issued under MiCA meet a unified standard.
Some regulators advocate for ESMA to take a more active role in supervision, including potential audits of national authorities issuing licenses. Others warn that excessive centralization could stifle innovation and slow the rollout of much-needed financial services.
Conclusion: A Transformative Moment for Crypto in Europe
The race to become MiCA-compliant is not just about regulatory approvals — it’s about defining the future of crypto in one of the world’s largest economic regions. As Coinbase and Gemini prepare to establish a strong presence in Europe, they are also testing the resilience and uniformity of the EU’s ambitious regulatory experiment.
While internal disagreements among regulators reflect growing pains, they also highlight the importance of maintaining trust and balance in the crypto ecosystem. With billions at stake and digital assets entering the mainstream, the EU's approach under MiCA will set a precedent for global crypto regulation in the years to come.
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