A recent survey by early-stage crypto investment firm Greenfield saw Lisbon, regulated by the Markets in Crypto-Assets (MiCA) bill, crowned as the world’s most important crypto city.
New York and Berlin came in joint second place, with the most recent go-to European crypto city Paris coming in seventh.
Lisbon’s DeFi Thrives as Europe’s Universities Expand Crypto Courses
About half of the founders of projects with European roots revealed Lisbon’s favorable tax laws and thriving DeFi scene as the main reasons. The Portuguese capital has also benefited from the outflow of crypto talent from the U.S.
New York’s easy access to venture capital funding and top-notch conferences worked in its favor. At the same time, Berlin’s reported glittering crypto track record and a robust developer pool saw it score brownie points with respondents.
Paris’ ace card is its thriving Web3 scene, replete with non-fungible token (NFT) and Web3 projects.
Additionally, the tertiary education landscape has started recognizing the importance of crypto education.
Universities in the U.K., Ireland, and Spain offer crypto master’s degrees. Swansea University in Wales, U.K., offers a Master of Science in Financial Technology. In Ireland, Dublin City University offers a Master of Science in Computing (Blockchain and Distributed Ledger Technologies). University Salamanca Spain offers a Master’s degree in blockchain and smart contracts.
Regulatory uncertainty in the U.S. has seen Coinbase launch an offshore derivatives trading desk. The exchange received approval from Irish Central Bank to operate as a Virtual Asset Service Provider in December.
Stablecoin issuer Circle recently set up shop in Paris, with Binance also claiming a substantial physical presence in the region.
Europeans Say MiCA Clarity Overshadows Concerns About Restrictions
Notably, survey respondents said user experience concerned them more than regulation.
Respondents argued that the clarity of the recently-passed Markets in Crypto-Assets bill was more important than any restrictions.
The bill included a controversial Transfer of Funds rule that demands crypto firms disclose the identities of parties on both ends of a crypto transfer. It also imposes strict disclosure and regulatory requirements on exchanges.
Notably, the bill does not address decentralized finance and NFTs, which critics urge lawmakers to consider soon. The bill has also been criticized for failing to address industry areas necessary to prevent many of last year’s crypto collapses.
Respondents see national supervisory authorities, which MiCA grants certain powers, as potential bottlenecks in launching crypto projects.
Despite MiCA’s shortcomings, its application across 27 member states means that, unlike the U.S.’s regulation-by-enforcement approach, firms have a clear, if lumbering, path to compliance.
Bipartisan disagreements have stalled many crypto bills in the U.S., allowing the U.S. Securities and Exchange Commission (SEC) to regulate by enforcement.
Alternatively, the U.S. Justice Department could develop case law around its many enforcement actions against crypto scammers. The former approach is not thorough enough, while the latter could take years.
SEC Commissioner Hester Peirce criticized the SEC for asking crypto firms to register through an untenable application process. To combat this, the SEC could offer licenses similar to MiCA, where firms registered in one state can operate in all member states.
They would already comply with all asset disclosures and money laundering requirements. Local state regulators could handle the everyday minutiae of the application process.
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