Bitstamp, one of the longest-running cryptocurrency exchanges, is actively engaging in discussions with several prominent European banks to facilitate the provision of cryptocurrency services. This development marks a significant contrast with the United States, where regulatory actions have made financial firms more cautious about embracing digital assets.
Moreover, the European Union’s comprehensive crypto regulatory framework, known as Markets in Crypto Assets (MiCA), appears to be instrumental in making traditional financial institutions more comfortable with the world of cryptocurrencies.
Bitstamp’s European Expansion
Bitstamp, a Luxembourg-based cryptocurrency exchange, has revealed plans to collaborate with three major European banks to enable them to offer cryptocurrency services, with an expected launch in the first quarter of the upcoming year. Robert Zagotta, the Global Chief Commercial Officer of Bitstamp and CEO of its U.S. division, made this announcement during an interview with CoinDesk.
MiCA’s Impact on European Banks
The willingness of European banks to explore cryptocurrency services can be attributed to the European Union’s MiCA framework, which provides comprehensive regulations for the crypto industry. This regulatory clarity appears to be a catalyst for traditional financial institutions in Europe to venture into the digital asset space.
Furthermore, this stands in stark contrast to the situation in the United States, where regulatory authorities have been actively pursuing stricter regulations for cryptocurrencies, making many traditional firms wary of involvement in the sector.
Shift in Crypto Operations from the U.S.
However, in the United States, some large and regulated firms are opting to move their cryptocurrency operations to more crypto-friendly jurisdictions, such as Singapore. This trend is a direct result of regulatory pressure and uncertainty surrounding the crypto industry in the U.S.
Bitstamp’s Regulatory Approach
Bitstamp, which obtained a BitLicense from the New York Department of Financial Services in 2019 and undergoes audits by EY has been successful in attracting interest from European corporations.
The exchange offers a “Bitstamp-as-a-service” solution, which is a white-label licensing and technology package. Designed to assist banks and fintech companies in offering cryptocurrency trading services.
The Aftermath of FTX and Binance
Bitstamp’s commitment to regulatory compliance has been underscored in the wake of issues faced by other cryptocurrency exchanges, such as FTX and Binance. Following FTX’s difficulties and its subsequent market share redistribution in November, Bitstamp also witnessed a 36% increase in the onboarding of corporate clients.
Moreover, in the first half of 2023 in comparison to that of 2022, Zagotta also emphasized the industry’s need to avoid major disruptions, like the collapse of a prominent player, highlighting the potential impact on the market.
Further, Bitstamp’s efforts to collaborate with European banks for the provision of cryptocurrency services reflect a growing trend in Europe, where regulatory clarity is encouraging traditional financial institutions to embrace digital assets.
In contrast, the United States is witnessing a shift of crypto operations to more crypto-friendly jurisdictions due to regulatory pressures.
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