Why crypto companies are flocking to Ireland ahead of MiCA

Ireland continues to be an attractive destination for crypto companies, with Coinbase becoming the latest to bolster its presence there.

Various companies in the segment have been expanding into the European Union ahead of the implementation of the Markets in Crypto Assets (MiCA) regulation.

Under MiCA — passed in April — crypto asset services providers (CASPs) that seek to serve EU clients must gain licenses from national authorities. The regulatory framework expects to go into effect for such entities at the end of 2024.

Coinbase chose Ireland as its “EU MiCA hub” due to the country’s supportive political environment for fintech companies and its “globally respected” regulator, the exchange said in a Thursday blog post.

In the US, Coinbase remains at odds with the US Securities and Exchange Commission, which sued the company in June for alleged securities violations. Coinbase has denied wrongdoing.

Coinbase opened up its Dublin office at the end of 2018 and received an e-money license from the Central Bank of Ireland the following year. It registered as a virtual asset service provider (VASP) in the country in December 2022. It also introduced an Ireland country director at the time.

VASPs in Ireland can offer five services to Irish customers, including the exchange between digital assets and fiat currencies, as well allowing the swapping of digital assets for others.

“Due to our existing operational structure in Ireland, we have access to deep talent pools with significant expertise in both financial services and innovative new technologies,” Coinbase said in its Thursday post.

Not just Coinbase

Dublin, as far back as 2018, was thought to be “one of the capitals of Europe’s burgeoning crypto economy,” according to Coinbase.

Others seem to agree.

Gemini became the first company to be registered as a VASP in Ireland in July 2022. The crypto platform’s co-founder, Cameron Winklevoss, told the Irish Times in May that Dublin would be Gemini’s “entry point” into the rest of Europe as MiCA is implemented.

Crypto firms flocking to the country follows a concerted effort by Ireland to foster innovation.

Ireland’s government in 2018 created an Innovation Hub — designed to allow fintech firms to engage with the Central Bank of Ireland in a more informal manner.

A third of inquiries into the Innovation Hub came from companies within the blockchain or crypto sectors — a slight dip from 39% in 2021, according to a March Central Bank of Ireland report.

“In particular, there was an increase in the number of enquiries from large, established crypto asset service providers,” the report notes. “While many focused on the VASP registration regime, some firms were also considering other authorizations including e-money, and MiFID authorizations.”

Crypto payment company MoonPay also gained VASP status in Ireland in August. CEO Ivan Soto-Wright told Blockworks that having such a registration, and eventually applying under MiCA, to passport across the EU “will be an immense competitive advantage.”

The Central Bank of Ireland authorized crypto exchange Kraken as an E-Money Institution (EMI) last month. The company noted that the license allows it to expand Euro fiat services in partnership with banks across the 27 EU member states.

Crypto giant Binance — currently in a legal battle with the US Securities and Exchange Commission — had considered making Ireland one of its headquarters, Reuters reported in October 2021. The company ultimately made Paris its European hub the following year.

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