Coinbase Moves to Enhance Presence in European Market
Coinbase, the cryptocurrency exchange, is expanding its European operations through the acquisition of a Cyprus-based entity licensed under the EU’s Markets in Financial Instruments Directive (MiFID).
The exchange explained that the acquisition aligns with Coinbase’s strategy to enhance its presence in the European market. The MiFID license is critical to the EU’s regulatory framework, governing investment services and activities across member states. It enables Coinbase to access a larger segment of the global crypto market, particularly in derivatives, which constitute a significant portion of crypto trading activities.
Compliance Emphasized Ahead of Acquisition
In expanding into Europe, Coinbase highlights its commitment to compliance with regulatory standards. The company has outlined a Five-point Global Compliance Standard, focusing on areas such as team vetting, Anti-Money Laundering (AML) and Know Your Customer (KYC) protocols, global sanctions enforcement, governance practices, and ongoing monitoring and reporting. These measures signify Coinbase’s approach to align with international regulatory requirements.
Over 400 professionals, with experience in various regulatory bodies, work in Coinbase’s compliance and legal team. Their past roles include work with institutions such as the FBI, DOJ, OFAC, FinCEN, and major banks. The completion of the acquisition is subject to customary closing conditions, including regulatory approvals. Coinbase anticipates finalizing the acquisition in 2024, marking a significant step in its European market expansion efforts.
2024 Crypto Market Outlook: Coinbase Releases Research Report
On 14 December 2023, Coinbase Institutional released a research report titled “2024 Crypto Market Outlook,” authored by David Duong, CFA, the Head of Institutional Research at Coinbase. Duong shared an overview of the extensive report on LinkedIn, diving into the anticipated trends and developments in the crypto market for 2024.
Duong observed that the total market capitalization of cryptocurrencies doubled in 2023, signaling an end to the “crypto winter” and a new phase for the asset class. He advised caution in interpreting this recovery as a definitive rebuttal to critics who prematurely declared the end of cryptocurrencies. According to Duong, the progress made over the past year exceeded expectations, solidifying the status of cryptocurrencies in the financial world. He sees the current challenge as leveraging this momentum to foster a stronger, more innovative crypto ecosystem.
Key Themes for the 2024 Crypto Market
- Institutional Investment in Bitcoin: Institutional investment is expected to remain focused on Bitcoin, especially in the first half of 2024. This trend is fueled by growing interest from traditional investors looking to enter the cryptocurrency market.
- Macro Framework Reset: The report predicts favorable macroeconomic conditions for risk assets in 2024. Factors such as ongoing disinflation, a potential slowdown in U.S. economic activity, and possible Federal Reserve rate cuts are seen as positive factors for the crypto market.
- Real-World Applications: Development of practical applications for cryptocurrencies is expected to continue, including in gaming, decentralized physical infrastructure (DePIN), and decentralized identity solutions.
- Blockchain User Experience: Ongoing efforts to enhance the user experience in the crypto space are highlighted. These improvements are expected to facilitate the industry’s shift from early adopters to mainstream users, marking a crucial evolution in blockchain technology.
Hot Take
The effort by Coinbase to expand its European presence through MiFID licensing and the anticipated trends identified in the 2024 Crypto Market Outlook are indicative of the exchange’s proactive approach in adapting to global developments in the cryptocurrency industry. These ventures position Coinbase to capitalize on the expanding influence of cryptocurrencies in the financial markets, fostering a dynamic, innovative ecosystem.
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