Bitstamp has disclosed its ongoing discussions with three prominent European banks about assisting them in launching cryptocurrency services. These discussions are poised to bear fruit in the first quarter of the coming year.
Bitstamp's Advanced Negotiations with Major European Banks
Bitstamp’s negotiations underscore the growing acceptance of digital assets within the European financial sector. This news comes at a time when the European Union is actively advancing its regulatory framework for cryptocurrencies, known as Markets in Crypto Assets (MiCA). It aims at facilitating the entry of traditional financial institutions into the digital asset space.
Robert Zagotta, the Global Chief Commercial Officer of Bitstamp and the CEO of its US division, shared this information during an interview with CoinDesk. He highlighted the increasing interest Bitstamp has garnered in Europe for its "Bitstamp-as-a-service" offering. The service provides white-label licensing and technology solutions designed to enable banks and fintech firms to offer cryptocurrency trading and investment services.
Zagotta revealed that Bitstampis currently in advanced negotiations with three major European banks although he did not disclose their names. He stated that announcements regarding these partnerships are expected in the first quarter of the upcoming year.
The contrasting regulatory environments between Europe and the United States were a key point of discussion in Zagotta's remarks. Europe has been actively establishing cryptocurrencyregulations and fostering partnerships between traditional financial institutions and cryptocurrency firms. However, the United States has taken a more stringent approach. This has led to some regulated US companies moving their cryptocurrency operations overseas such as Singapore, which has become a popular destination.
Bitstamp's Cautious and Regulatory-Compliant Strategy
Bitstamp was granted a BitLicense by the New York Department of Financial Services in 2019 and has undergone audits by Ernst & Young (EY). It has also been experiencing heightened demand in Europe for a fully regulated perpetual swap product. Zagotta confirmed that Bitstamp is actively working on providing this product to meet the needs of its expanding user base.
The cautious and regulatory-compliant approach adopted by Bitstamp seems to be paying off. This comes in the wake of the collapse of FTX and regulatory challenges faced by the cryptocurrency exchange giant Binance. These incidents have led to increased scrutiny of the industry.
Although Bitstamp saw an increase of 36% in corporate onboarding during the first half of 2023 compared to the latter half of 2022, the boost was partly attributed to the redistribution of market share following FTX's exit from the market.
Zagotta emphasized the significance of maintaining a stable and regulated cryptocurrency industry. He highlighted the potential risks associated with the implosion of major players in the market and pointed to the possibility of further regulatory actions impacting other major exchanges like Binance.
“If Binance were to go down, the disruption in the marketplace would be just enormous,” Zagotta said. “So we don’t wish for them to literally go down in flames like FTX. We just are hopeful that there’s a level playing field across all of us. I think we’ll get there.”
Bitstamp's ongoing discussions with European banks reflect the shifting dynamics of the cryptocurrency industry. While regulatory challenges persist, Bitstamp's measured approach to compliance and governance appears to be a winning strategy in an increasingly complex and evolving landscape.
This article was written by Tareq Sikder at www.financemagnates.com.
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