The Cryptonomist interviewed Gillian Lynch, CEO of UK & Europe of the Gemini crypto exchange to talk in particular about their plans to expand in Italy and the UK and about MiCA regulation.
Gemini has big plans for European expansion, particularly in the UK and Italy. What specific strategies are you implementing to make these markets a success over the next 12 months?
Gemini is already available in over 30 countries in Europe, offering digital asset exchange and custodian services to both retail and institutional customers. Nevertheless, our Growth and Product teams are continuously looking to expand our offerings in these regions.
While Gemini continues to prioritise Europe as a strategically important region globally, we have identified a number of target countries within Europe as potential high growth markets. This includes the UK and Italy, which we will focus additional investment, marketing and product resources into over the next 12 months. We have some exciting announcements soon, including new European country launches, as well as an exciting marketing campaign that reaffirms our vision for a digital economy.
In your view, what sets the UK and Italian markets apart from other regions when it comes to cryptocurrency adoption?
Gemini’s 2024 State of Crypto report showed that crypto ownership globally stood at 18%, with the market remaining resilient during the crypto winter. The UK had some of the highest numbers of past owners looking to re-enter the market, suggesting positive signs of further growth in the coming months as we edge closer to new Bitcoin all-time highs.
The UK has historically positioned itself as a European fintech hub, welcoming investment and talent across the fintech sectors, however, clarity on a regulatory framework in the UK will heavily shape the future of the crypto market. Gemini is in full support of thoughtful, common-sense and forward-thinking regulation in order to realise the profound promise of crypto, and we’re a member of CryptoUK to engage and promote this dialogue.
Gemini welcomed the passing of the UK’s Financial Promotions regime and updated AML/CTF guidelines by the FCA over the past year, but further regulatory clarity will give consumers and industry players more confidence to operate in the UK.
Although the adoption of crypto in Italy is slightly lower than some other European nations, Italy has an economy well-suited for crypto adoption. It’s the 3rd largest country and economy in the EU, has a good savings and investment culture, a population with a high level of disposable income, and is readily embracing a digital payments infrastructure, particularly post-COVID.
Italy’s cautious but progressive approach to regulation includes the government’s strict anti-money laundering (AML) measures and registration requirements for virtual asset service providers (VASPs) which has created a safe and trusted environment for users. We hope that the upcoming MiCA regulations that include Italy will create a further structured regulatory framework.
The regulatory landscape in Europe is constantly evolving. How is Gemini navigating these changes to ensure compliance while still fostering innovation?
Gemini is committed to upholding regulatory standards. Our mission is to unlock the next era of financial, creative and personal freedom, and building trust is a key element of that. Our Founders have always prioritised the security of our customer’s assets and seek to ask for permission, not forgiveness when building our business model. Since our inception eight years ago, we’ve worked with regulatory stakeholders and lawmakers to help shape thoughtful regulation that fosters both consumer protection and innovation, whilst championing best practices that encourage market integrity and innovation, and will continue to do this as we grow in Europe.
We believe that MiCA is a much-needed part of the regulatory landscape in Europe. It offers some consistency and clarity across multiple jurisdictions, and generally balances innovation whilst providing the proper safeguards for consumer protection. However there is no doubt that as the industry and technology continues to develop at pace, the regulation will also have to evolve to include new products and services that enter the market, much like we have with MiFID in the traditional financial sector.
What are the main takeaways from Gemini’s ‘State of Crypto’ report, specifically in terms of crypto adoption and attitudes in the UK and French markets?
Gemini’s 2024 Global State of Crypto report revealed some unique insights into adoption and behaviours across the world. We’ll be releasing additional, country-specific data from our UK and France results in the coming weeks. In the meantime, some of the key global results showed that crypto investors remained resilient during the market downturn with crypto ownership remaining steady between 2022 and 2024. This is due to the majority of crypto owners favouring crypto due to its long-term investment potential and hedge against inflation. Meanwhile, over 70% of past owners reported a potential interest in returning to the market.
Other findings showed that spot exchange ETFs are increasingly popular, where in the US, nearly two in five crypto owners surveyed said they hold some crypto through an ETF. However, barriers to entry seem to be a lack of knowledge and regulatory clarity, where less than 2 in 10 survey respondents in the UK, France and Turkey said they felt knowledgeable about crypto. This shows an opportunity for improved education to boost trust.
Based on the research findings, what trends do you see shaping the future of crypto adoption in Europe, and how is Gemini positioning itself to lead in this space?
Our State of Crypto report showed positive signs of growth and optimism, but also highlighted the importance of education and regulatory clarity to build trust with consumers, which Gemini has a key role to play in.
One of the trends for growth could be ETPs, having seen how the introduction of ETFs in the US caused a rebound in prices. Whilst the crypto ETP market in Europe is significantly smaller than the US, changes in the European regulatory stance towards them could suggest where the crypto ETP market could go in the region moving forward. Nevertheless, our State of Crypto report showed that familiarity with crypto ETPs is relatively modest in Europe, highlighting an opportunity for raising awareness about their benefits.
The state of regulation globally will heavily shape the future of the crypto market. Our Founders recognised over a decade ago that cryptocurrency has a huge part to play in the future of the financial ecosystem, but clear and consistent regulations such as MiCA are vital to enable this. It’s hoped that MiCA will address the fragmented regulatory landscape in the EU at the moment. The new regulatory approach in the EU is in contrast to the regulation by enforcement that we’ve seen in some other jurisdictions. Not only could this attract more investment to the region, but may encourage other markets to follow suit with similar kinds of regulations that foster, not hinder, the growth of the crypto space. We’re committed to leading by example and setting benchmarks for the sector by upholding regulatory standards in Europe and beyond, and have a full programme underway to ensure we are MiCA compliant by the stated deadlines.
Can you share some of the challenges and opportunities you foresee as Gemini expands its presence across Europe?
Regulation, trust and security are at the core of what Gemini does and strongly informs our products, business growth plans and operations, which is what sets us apart from our competitors. However, this is not always the fastest route to expansion.
The diverse regulatory framework in Europe has historically been a challenge for all crypto companies. However, regulatory clarity and consistency in the form of MiCA will help assist with our expansion as any MiCA-authorised entity can “passport” to operate across all EU countries and access a market of 450 million people.
Another challenge, but also opportunity, is market awareness, where our State of Crypto report showed that only 13% of survey respondents in the UK and France said they felt knowledgeable about crypto. Nevertheless, 34% of respondents in these countries said they had an interest in learning more about cryptocurrency, which shows an opportunity to further educate users through tools such as our Cryptopedia. Cryptopedia is Gemini’s educational resource hub covering a wide range of topics from basic blockchain fundamentals to complex trading strategies, offering curated, expert-led content that empowers users with the knowledge to navigate the crypto landscape confidently.
When it comes to DeFi and traditional banking, do you see more potential for convergence or collision between these two worlds? What role do you think Gemini can play in bridging the gap?
DeFi has plenty of advantages which could remove the need for many of traditional banking’s functionalities. Thanks to the open blockchain network that negates the need for intermediaries, it can improve transparency, efficiency and speed, whilst reducing costs. Nevertheless, there are still some drawbacks to DeFi which need to be addressed before it can fully overtake traditional banking, such as concerns about volatility, liquidity and scalability.
We don’t necessarily believe that DeFi and traditional banking have to compete; it’s more realistic that they will co-exist for some time to come, and complement one another by using each other’s services. Gemini will play an important role in this by linking traditional banking infrastructure with the benefits of DeFi, using easy on and off ramps and an intuitive user interface. For example, in the UK, we are authorised as an EMI and integrate with banks to allow customers to fund their account with traditional currencies, which could allow you to easily utilise our Staking Pro product to earn rewards.
How do you envision the relationship between DeFi platforms and traditional financial institutions evolving over the next few years, especially in the context of regulatory pressures?
The benefits of traditional finance over DeFi have historically been that they are heavily regulated, use assets that are relatively stable with plenty of liquidity, and often offer insurance for deposits. However, DeFi does not have to be a replacement for the traditional banking system but can complement it by establishing use cases relevant to it, providing banks understand the benefits of the technology.
For example, with the growing importance of stablecoins, particularly in light of MiCA where they are more regulated in Europe, banks could also begin to integrate stablecoins into their operations to facilitate cross-border payments, remittances, and faster settlements, bringing efficiencies from DeFi into traditional finance.
Alternatively, CBDCs can bridge the gap between traditional banking and DeFi. Today, most central banks are actively researching and studying the concept of CBDCs, a government-backed, stable digital asset which includes the features of DeFi, combining the benefits of decentralisation whilst securing their stability and the usual trust that government-backed currencies have.
What milestones or developments should we expect from Gemini in the European market in the next year, and how will they impact both new and existing users?
Gemini is committed to enhancing our user engagement and broadening our services in strategic European markets over the next 12 months through investment and expertise. We’re launching in a major market next month, expanding our services and offerings in existing regions to both retail and institutional customers, and will be revealing a global brand campaign to support our vision, which will appeal to new and existing users.