Coinbase Expanding In Europe to Gain Some Paying Customers
Amidst Crypto Winter, after laying off 1000+ employees, Coinbase is now looking to expand in European countries to gain some customers.
Coinbase is seeking licenses across Europe to create a smoother and more stable period for growth. They are looking to solidify its presence and expand into new markets.
The exchange is interested in investing in other countries and setting up operations. In addition to the U.K., Ireland, and Germany, they are considering expanding to France, Italy, Spain, Switzerland & the Netherlands. They want to hire more employees in these countries as well. Recently, they onboarded their first-ever employee in Switzerland as per the statement of the company’s vice president of international ‘Nana Murugesan’.
A regional manager will be responsible for security and compliance. When asked to clarify which departments this would include, he responded that it could include all of the mission-critical roles. Murugesan added that Coinbase has been expanding rapidly, but this is not stopping them from having a period of growth.
When Murugesan joined Coinbase in January 2022, the U.K. and Europe were already on the path to recovery following a large financial downturn previously in 2015-2016.
He added that, in 2017, the U.K. became a major focus of the company and Europe was also a large part of its business.
Coinbase is in talks with representatives of European Union countries, such as France to work under the Anti-Money Laundering (AML) laws, said the vice president of legal at Coinbase, Katherine Minarik.
The company prepared for the EU tie-up between the regulation of crypto and MiP that was announced in MiCA.
The European Council is expected to meet this Thursday in order to reach an agreement on MiCA—a trade deal between Africa and Europe. Officials from both trade partners are confident that the deal will go into effect by 2024.
Coinbase had to get approval from the EU regulator before it can offer its services in Europe.
What’s the future holds? Who will win this long race?
Coinbase has solidified its stake as the cryptocurrency exchange, but they are facing intense competition from newer competitors like Binance. And, this fierce battle resulted in a plunge in the shares of Coinbase after their competitor ditched fees for customers trading bitcoin.
Coinbase’s challengers are catching up to their success, which is mostly confined to the US.
Binance is planning to expand in Europe. In the Middle East, Binance & FTX both obtained licensing in Dubai.
Murugesan acknowledged that it is challenging to maintain quality work, but they want to stay the course. The level is very high to reach, sometimes taking a bit longer to get things done, he admitted.
Crypto prices are plunging, and while some believe it is the start of crypto winter, others believe it is just a temporary dip.
Increased interest rates and the collapse of the UST stablecoin lead to a slump in token prices, which causes investment firms to become insolvent.
Increasing operating costs led to a sudden change in Coinbase’s strategy of reducing headcount. The changes affected 18% of the global workforce but impacted 7% of Coinbase’s U.K. employees. With the layoffs, they are now focusing on improving customer service to provide better experiences with cryptocurrency trading and transactions.
Coinbase is working on accessing new products, such as nonfungible tokens and staking. Although it has been relying heavily on trading fees for its revenue, Coinbase reported a 27% decline in revenues due to a decline in overall usage of the platform.
The Coinbase platform has more than 9 million monthly active users, but out of them, less than 50% are engaged in trading activities. Murugesan said this statistic suggests that the company is able to offer multiple products and has established itself as a leading institution in specific markets.
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