In a study by the American blockchain analysis firm Chainalysis, the United Kingdom (UK) has emerged as the most prominent crypto economy in the Central, Northern and Western Europe (CNWE) region.
The UK ranked 14th on Chainalysis’ Global Crypto Adoption Index for Grassroots Adoption. Regarding raw crypto transaction volume, the UK stood as the 3rd largest in the world, receiving an estimated $252.1 billion in the past year.
Jamie McNaught, Founder and CEO of UK-based crypto exchange Solidi, explained the reason behind these rankings, “Customers in the UK typically seek alternatives to poor savings and investment returns — varying from propping up underperforming investment portfolios to customers going all in, looking for high returns on tokens or NFTs. While NFTs are no longer in favour, customers continue to look for overperforming, long-term returns in Bitcoin — particularly with the anticipated 2024 halving — and Ethereum, while also making sizable bets on XRP, Cardano, and Solana.”
Most crypto firms are awaiting the introduction of the Financial Conduct Authority’s (FCA) Financial Promotions Regime, set to be rolled out in October 2024. Starting October 8, 2024, the FCA Financial Promotions Regime in the UK will regulate all crypto asset transactions. If firms don’t meet FCA standards, they won’t be able to promote crypto-related financial products legally.
Businesses such as crypto exchange Luno and crypto payments provider PayPal announced their intentions to pause UK customers’ ability to purchase specific crypto, saying that they need time to comply with FCA’s new laws.
Other than the UK, five economies in the CNWE region were among the ‘top 50 grassroots crypto adopters’ globally, including Spain, France, Germany, Italy, and the Netherlands.
The Central, Northern, and Western Europe (CNWE) region ranked as the second-largest crypto economy this year, just behind North America. CNWE alone accounted for 17.6% of global transactions between July 2022 and June 2023, receiving an estimated $1 trillion in on-chain value.
Although crypto adoption in CNWE is still in its nascent stage, many industry leaders are excited about what’s to come. According to Alessandro Perillo, Chief Operating Officer of Italy-based Young Platform, the potential for innovations, especially in smart contracts, NFTs, and DeFi, is immense. He said, “It will be interesting to see how traditional financial institutions, tech startups, and regulators navigate through the challenges and opportunities presented by the crypto space.”
The crypto industry is rapidly evolving, which presents both opportunities and challenges. Achieving regulatory harmonisation across European nations is crucial for shaping the industry’s future.
The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash