Crypto asset exchange Coinbase says it has selected Dublin as its main regulatory and operational hub for the EU ahead of the implementation of the bloc’s new regulations for digital assets, according to CNBC in the US.
The Nasdaq-listed company has had a presence in the city since 2018, employing 130 people in Ireland at last count after a number of rounds of job cuts over the past year.
Under the EU Markets in Crypto Assets (MiCA) regulation, set to be enforced from 2024, crypto trading platforms are required to apply for a licence from the competent authority in one member state.
Once authorised by the regulator, the licence will give the company regulatory “passport” of sorts, which is recognised by other EU countries, making it easier to roll out products and services elsewhere within the union. In the Republic, the competent authority is the Central Bank of Ireland, although it is understood that Coinbase has not yet submitted its application for authorisation.
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Cormac Dinan, who leads Coinbase’s Irish operations, told The Irish Times in February that Dublin was on a shortlist of cities from which the company could passport its services into other EU countries once MiCA is implemented.
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“The reasons for that are wide and varied,” he said, highlighting the “ecosystem of talent” flowing from the State’s reputation in the global funds and financial services sector generally. “And I think the other thing is that the Central Bank of Ireland is very reputable,” he said. “There’s a lot of partners for us, a lot of customers, a lot of institutional clients who would much prefer to see us regulated by the Central Bank than other regulators.”
If selected, he said, the decision could lead to an “uplift” in staff numbers at the company’s Dublin office.
Nana Murugesan, Coinbase’s vice-president of international, said in an interview with CNBC: “As soon as MiCA was passed into law, and even before that, we’ve been considering a number of member states. It was a long decision-making process and we’ve been very impressed with the engagement from Ireland throughout.”
He said: “It was really important for us to choose a member state that is not only a sophisticated regulator with significant experience in regulating financial services, but also recognises the importance of a globally integrated business model, the way we are structured as a company, and also the potential of this innovative new technology.”
A spokeswoman for the Central Bank of Ireland said: “The Central Bank of Ireland recognises the potential benefits of innovation in financial services. However, as with all innovation, it is only beneficial if it comes hand-in-hand with adequate management of the risks. In that regard we welcome MiCAR (Markets in Crypto Assets Regulation) as an important step forward in addressing the gap in regulation of crypto-related services – and note that firms will now have to apply for authorisation under this regime.”
However, the regulator said it is important for consumers to note that MICA will not provide the level of protection to them that exists in other areas of retail finance. “While MiCAR authorisations will introduce some guardrails for consumers and investors, it will not prevent people potentially losing money if the value of the crypto asset falls in a volatile market, or if a firm were to get into difficulty.”
