The EU’s comprehensive work on regulating the industry will provide numerous benefits to crypto companies and their customers, argued Christian Niedermüller, CEO of the fully regulated crypto platform Blocktrade, in an interview with Cryptonews.
However, it will also create certain difficulties that are bound to affect crypto firms – specifically, in terms of costs of compliance and reporting.
That said, the advances in regulating the industry made by the EU are drawing more companies to the area, especially from regions with notoriously unclear regulatory approaches, such as the USA.
Finally, Niedermüller explained how gamification helps crypto companies grow, Blocktrade included.
Let’s dive in.
More Companies, More User Trust, and More Costs
While the clarity of EU regulations will bring more companies to the region and more trust among customers, it will also raise challenges for many crypto providers in terms of costs, Niedermüller said.
Recently, the EU lawmakers approved the much-anticipated, comprehensive framework for crypto, Markets in Crypto-Assets (MiCA).
The biggest benefit of MiCA is that companies will need to obtain one license for the EU, Niedermüller told Cryptonews.com.
While the rules are now scattered and unclear, the European Union seems to have understood the “benefits of having one financial crypto market.”
The latest we should expect it to be enforced is January 1, 2025.
But Niedermüller also expects to see front-running from some jurisdictions and players in terms of fulfilling the requirements. For example, Estonian regulators, he said, have implemented many of them already.
He noted that,
“With tighter regulations, we will see more trust from people.”
Not only will the rules be clearer for the companies, but the users as well.
Costs and Paperwork Aplenty
While there are many positives to MiCA, it is bound to make some aspects more difficult.
Requirements on the compliance and reporting side of things will demand more tools, resources, and staff, including employees in the compliance and legal departments.
Furthermore, many audits need to be put in place. And these are costly.
“Last year alone, Blocktrade paid €80,000 for audits. We paid a huge sum for lawyers’ advice in this direction, and had to have a lot of stuff [such as] transaction monitoring tools and a very professional, audited custodian.”
Many crypto providers will have huge problems because of the costs, because we are still “a little bit in a bear market,” Niedermüller said, and revenues are not coming as many anticipated. At the same time, regulation is picking up.
Therefore, it is likely we will see a lot of consolidation and increased professionalism in the market as MiCA kicks in.
US Companies Potentially Migrating to EU After Recent SEC Moves
The CEO has noticed that some US companies are either thinking about coming over or are already moving to Europe.
The USDC stablecoin issuer, Circle, just recently announced that it will house its European headquarters in Paris, for example.
“Because [companies] have clarity in Europe.”
The USA can’t give them the regulatory certainty they need, and one may argue that it has been proven with the latest series of legal moves made by the Securities and Exchanges Commission (SEC), specifically against Binance and Coinbase.
It is also probable that other countries will copy MiCa to some extent, Niedermüller said.
Gamification as an Important Part of Future Growth
“We don’t want to be just like any other crypto exchange, so last year we went out with a new strategy developed around gamification and gaming,” Niedermüller said.
The goal is to overcome a common challenge in the industry: users using a platform only occasionally. This is not useful to the user, the company, or investors.
But engaging the user and making the interaction an entertaining and rewarding experience will make them come to the platform frequently.
Blocktrade works on enabling its users to utilize the BTEX token in a gamified environment to gain benefits, such as discounts on credit card deposit fees, higher cash back, and more API on the staking once it’s introduced in the summer.
At the end of May, Blocktrade announced the close of its exclusive BTEX sale round, raising €4.5 million from over 1,400 community members in 42 countries.
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Learn more:
– Markets in Crypto-Assets (MiCA) Framework Signed into Law by EU Officials
– MiCA: A Catalyst for Increased VC Funding in European Crypto Startups
– Blocktrade Closes Blocktrade Exchange Token Sale Round
– Blocktrade Launches Gamified Crypto Platform Blocktrade 3.0
– Blockchain Games in 2022: Play-to-Earn, Gamification, Interoperability and Major Publishers
– Top 10 NFT Games To Play (And Earn)
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