Friday, March 29

Coinbase seeks Europe licenses in bid to expand growth outside US


Coinbase reported a 27% decline in revenues in the first quarter as usage of the platform dipped.

Chesnot | Getty Images

Coinbase is seeking licenses with various countries in Europe as part of an aggressive expansion in the region.

The exchange already has an active presence in the UK, Ireland and Germany, but wants to set up operations in Spain, Italy, France, the Netherlands and Switzerland, according to Nana Murugesan, Coinbase’s vice president of international. Coinbase recently hired its first employee in Switzerland, he says.

The US crypto giant is looking to international markets to drive growth amid fears of a looming “crypto winter.” Earlier this month, Coinbase announced it would lay off 18% of its workforce, while other firms including Gemini and BlockFi have taken similar steps amid a fall in crypto prices.

Still, Murugesan says Coinbase is planning to hire a regional manager to oversee its European operations. The firm is mainly prioritizing “mission-critical roles” in fields like security and compliance after a period of rapid growth, he added.

“When we entered UK and Europe, this was actually during the last big bear market in 2015-2016,” said Murugesan, who joined Coinbase in January 2022.

“But then when you fast forward to 2017-2018, the UK is now a massive part of our business, as is Europe,” he added. “We entered, we made bets. I’m sure it was probably a tough time. But it’s paid off, significantly.”

Coinbase is in talks to get approval under anti-money laundering rules in a number of countries, including France, said Katherine Minarik, the company’s vice president of legal.

Also Read  A new shooting leaves at least one child dead and three injured in Washington

The company is gearing up for MiCA, or Markets in Crypto-Assets, a landmark piece of legislation from the EU that aims to harmonize the regulation of crypto across the bloc.

Officials from the European Council and Parliament are due to meet Thursday in a bid to reach an agreement on the rules. If everything goes smoothly, the expectation is that MiCA will come into force by 2024.

Once approved, it will enable Coinbase to “passport” its services into all 27 EU member states, Minarik said.

Slow and steady wins the race?

A confluence of factors is weighing on the market, including higher interest rates from the Federal Reserve and the collapse of the UST stablecoin. The slump in token prices has in turn led to solvency issues at investment firms that loaded up with leverage, like Three Arrows Capital.

Also Read  Marble head of Hercules pulled up from Roman shipwreck site in Greece | Greece

Coinbase made a sudden U-turn on its cost-cutting strategy this month, announcing plans to cut roughly 1,100 employees globally. Though the cuts affected 18% of Coinbase’s global headcount overall, Murugesan says its UK workforce was less impacted with around 7% of roles cut locally.

Coinbase reported a 27% decline in revenues in the first quarter as overall usage of the platform declined. The business is currently heavily reliant on trading fees. But it’s hoping to diversify into new products, including nonfungible tokens and interest-like rewards known as staking.

Coinbase has around 9.2 million monthly transacting users globally but less than 50% of those are using the app for trading, Murugesan said.


www.cnbc.com

Leave a Reply

Your email address will not be published. Required fields are marked *