Why Did Coinbase Choose To Settle Down In Ireland?
The United Kingdom has maintained their position as the center of digital asset firms in Europe after Brexit. However, according to a report from Abacus Journal, any digital asset firm that only has a UK office, or that are coming into the EU for the first time, will have to have an office in a member state to keep up with their performance. While many firms have choses to stay out of Ireland, Coinbase decided to get comfortable in Dublin by March of this year.
While much of Coinbase’s reasoning seemed to be in an effort to continue operations and services, other digital asset firms have been apprehensive. So far, the country has not actually created any legislation to regulate the crypto space within their borders. Furthermore, the Central Bank of Ireland (CBI) has already expressed their cautious acceptance of these kinds of firms, while other financial institutions are worried about getting involved in a business relationship with them.
The CBI released a discussion paper in the spring that expressed a new view that the nation had on digital assets, around the same time that Coinbase set roots in Dublin. Since that decision, the CBI created an “Innovation Hub” for FinTech, helping firms to progress in their financial services. However, considering the way that other member states of the EU are working on similar and potentially better strategies, Ireland will need to do a lot more to bring in other firms.
As stated above, there are no regulatory measures that are managing the way that digital assets are traded, sold, or otherwise treated. With no certainty, it should not be a surprise that other platforms are trying to play it safe. Still, there are a few laws that pertain to such a predicament.
One such rule is regarding ICOs. There is a type of asset called a “transferable security.” Any token that can be considered this type of asset will be subjected to the 2014 European Union Markets in Financial Instruments Directive (MiFID II), along with other legislations.
However, the actual classification of a digital asset or offering is often determined individually. However, this lack of definition makes it harder for digital asset firms to follow the regulations that are required of them without being in breach of the laws.
Getting banking services with banks in Ireland is a difficult process. When trying to open accounts in Ireland, many digital asset companies ultimately had to stop their operations or look outside of Ireland to be banked. Each bank varies; the Bank of Ireland said that they do not provide services for digital asset platforms, while Allied Irish Banks “does not discriminate” against offering the same services. However, the only way to be approved is to comply with their AML/CTF laws and regulations. Ultimately, digital asset companies should expect to continue with these roadblocks until some kind of official regulation is established for digital assets.
There are many countries that have established regulations that make it easier for firms in their area to function, like Estonia, France, Isle of Man, Lithuania, Netherlands, , Malta, Switzerland, and the UK. While Ireland seems to have many benefits, the lack of framework is keeping the country from reaching the same or greater success than that of other EU member states.
To view this report from Abacus Journal in its entirety, visit https://abacusjournal.com/report-coinbase-and-ireland-why-has-the-popular-exchange-established-corporate-residency-in-ireland/.