[EXCERPT] JB Graftieaux (Coinbase) - Crypto after MiCA: regulated, consolidated, decentralised

SPEAKER_1 (0:00)

A new episode of Finscale will be available in a few days. Solenne Niedercorn and her guests will reveal new initiatives transforming the world of finance. Enjoy the show.

Solenne Niedercorn-Desouches (0:13)

So you said a bad word.

He said MiCA. So we're not going to go in too many details, but I think it's worth taking a little time to explain what it means to come from a VASP license to MiCA license. Because you consolidated six different licenses in Europe into one, which is based in Luxembourg. You've been now officially MiCA regulated. So what does it mean for you as a team to have that consolidation performed ? Also in terms of operationally, what are the impacts ? Can you stop a little bit there ?

JB Graftieaux (0:55)

Yeah. So again, if we look at the maybe the last 12 years or 14 years for the crypto market, what we have seen initially is that there was no regulation. That was the start of crypto maybe early 2010 And at least in Europe, what we have seen is a patchwork of regulatory framework. So in each country where a crypto player was willing to operate, you had to acquire or gain a VASP registration at the time, which means that if you want to be in Spain, Italy, France, you need to have a local registration in those countries. And there was no harmonization. It was very local. And you can imagine to have a portfolio of six, eight, 12 different registration, it was very expensive to maintain. It was very complex to maintain as well.

And that framework has been replaced by the MiCA framework.

Very recently. And I think the power of MiCA today is that there is an harmonization at EU level. So with one license, a crypto player can operate everywhere in every EU member state. And like a bank or like a payment service provider, can passport the activity everywhere in the EU. But what does that mean also is that, I would say the investment, the cost of getting a MiCA is quite significant. You know, you need to build proper governance, large package of controls and compliance and regulatory.

SPEAKER_1 (2:27)

I know that by heart.

JB Graftieaux (2:28)

You know by heart. Exactly. So it's, yeah, it's kind of a...

SPEAKER_1 (2:32)

It's very heavy.

JB Graftieaux (2:33)

It's very heavy. Yeah.

Solenne Niedercorn-Desouches (2:34)

Also in terms of culture, I guess.

JB Graftieaux (2:36)

Yeah, I mean, you need to build the proper governance. You know, it's almost like operating a bank or even like a MiFi company. It's a bit the equivalent of MiFID for crypto, which means that you need to invest, you know, very significantly in staffing, in security, in regulatory. But at the same time, I think the reward of MiCA is an harmonized regime across the different EU member states. And you don't have to operate, you know, in every single local country like it was at the time with the VASP regime. So it's a big change, which is a positive change in my opinion.

You mentioned earlier, do we see an uptick in the institutional, you know, interest in crypto ? I think MiCA is one of the elements, you know, creating or enabling also that interest, because by being regulated as a MiCA entity, that will generate additional trust in the ecosystem, and that will attract more consumer, because the consumer protection is, you know, reinforced, but that will also attract more institutional players willing to partner with a regulated entity subject to very strict rules and security and compliance framework. So we have very, very, I would say, at Coinbase, very supportive of MiCA. There will be MiCA too in the future, obviously, but I think that's the key to enter the market and be the most trusted actor, and the actor of reference to partner with institutional customers, and also consumers in the region.

SPEAKER_1 (4:07)

Thank you for listening to Finscale. Don't hesitate to subscribe to the newsletter on Substack to stay up to date with the latest innovations. You can also find the podcast in audio format on all listening platforms and in video format on YouTube. See you soon with Solenne Niedercorn.