Bitstamp, one of the longest-running cryptocurrency exchanges, is forging ahead with plans to collaborate with three prominent European banks, aiming to provide cryptocurrency services starting in the first quarter of the upcoming year. This noteworthy development comes amid an environment where the European Union’s comprehensive cryptocurrency regulatory framework, known as Markets in Crypto Assets (MiCA), is fostering a more welcoming environment for traditional financial institutions to venture into the world of digital assets.
Contrastingly, the United States has been experiencing a regulatory crackdown, causing many traditional firms to approach cryptocurrencies with caution and compelling crypto companies to contemplate relocating elsewhere.
Bitstamp’s strategic efforts to engage European banks in the cryptocurrency space have gained significant traction, primarily through their relatively recent “Bitstamp-as-a-service” offering. This white-label licensing and technology package is specifically designed to assist banks and fintech companies in facilitating cryptocurrency buying and selling.
Robert Zagotta, Global Chief Commercial Officer of Bitstamp and CEO of its U.S. division, highlighted the surge in interest from large European banks in the last six to nine months regarding their cryptocurrency service offering. Zagotta revealed that advanced discussions are underway with three prominent European banks, without disclosing their names. He anticipated that they would be able to make an official announcement around the first quarter of the upcoming year.
On the flip side, the situation in the United States appears to be less favorable. According to Zagotta, some large, regulated U.S. companies are relocating their cryptocurrency operations to jurisdictions like Singapore due to the tightening regulatory environment.
While the U.S. is imposing stricter regulations on cryptocurrencies, Europe has been diligently implementing its regulatory framework. As a result, traditional financial institutions are increasingly partnering with cryptocurrency firms and devising strategies to enter the digital asset space, with heavyweight players like Deutsche Bank and HSBC making headlines.
Bitstamp, which secured a BitLicense from the New York Department of Financial Services in 2019 and undergoes audits by EY, has also observed growing demand for a fully regulated perpetual swap product in the European market. The exchange has been actively working on developing this product to meet the evolving needs of its clientele.
In the view of Robert Zagotta, Bitstamp’s commitment to robust regulation and governance is beginning to pay off, especially in light of recent setbacks faced by other cryptocurrency exchanges like FTX and regulatory challenges encountered by industry giant Binance. Zagotta noted that Bitstamp witnessed a 36% increase in corporate onboarding during the first half of 2023 compared to the second half of 2022. Some of this growth can be attributed to the market share redistribution following FTX’s demise in November.
However, Zagotta cautioned against another major disruption in the cryptocurrency industry, alluding to the potential impact of the collapse of a significant player like Binance. He expressed the hope for a level playing field across the industry and emphasized the importance of stability and regulation in ensuring the industry’s continued growth and success.
While the cryptocurrency landscape is continually evolving, Bitstamp’s efforts to collaborate with European banks and uphold a robust regulatory framework position it as a significant player in the ongoing transformation of the financial industry. As traditional finance and cryptocurrencies converge, Bitstamp’s initiatives could pave the way for more accessible and regulated cryptocurrency services within the European Union.
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