- Six countries from the region were included in the list of the top 50 countries for grassroots adoption.
- Britain remained a crypto powerhouse, leading the region in transaction value.
Cryptocurrencies and blockchain technology have become a global phenomenon over the past decade, leading people of all nationalities and ethnicities to integrate them into their financial lives.
Analysis of crypto growth in the CNWE region
One of the most prosperous regions in the world, Central, Northern and Western Europe (CNWE), has also not been aloof from the ever-expanding horizons of digital assets. In fact, it was the second largest crypto economy in 2023, according to the blockchain analytics firm Chain analysissurpassed only by North America.
In the period between July 2, 2022 and June 2, 2023, the CNWE region was responsible for 17.6% of global transaction volume
Source: Chain analysis
Additionally, about six countries in the region, including the United Kingdom, Spain, France, Germany, Italy and the Netherlands, were among the top 50 countries for grassroots crypto adoption, according to a report published earlier this year.
Interestingly, the region had significant penetration of decentralized finance (DeFi), accounting for more than 50% of the total value of cryptocurrency transactions. The report stated that decentralized exchanges (DEXs) played a major role in driving cryptocurrency adoption in the region.
This was in stark contrast to adoption trends in Latin America, where centralized exchanges (CEXs) were the platforms of choice for crypto trading.
Source: Chain analysis
UK: the European crypto hub
The UK remained a global crypto hotspot, ranking third in terms of transaction volume after the US and India. The country recorded a crypto trade worth $252 billion last year.
Source: Chain analysis
But that is not everything. Britain was the second-largest crypto employer in the world, according to the digital asset analytics firm K33 Research. Nearly 13,000 employees worked for companies in the country, second only to the US
Furthermore, almost a third of all crypto employment in Europe was concentrated in Britain.
Source: K33 Research
Britain’s crypto dominance followed a logical progression from being the European financial powerhouse. The city of London is indeed one of the largest centers for international finance and technology. This solid foundation enabled significant institutional investments in blockchains.
“The institutional crypto growth in Britain is not surprising, given the country’s reliable and connected banking sector and history of relatively low inflation until recently,” said CEO of the local crypto exchange. Solidi Jamie McNaught said and Chainalysis quoted.
Mcnaught also stated that people in Britain were seeing cryptos, especially Bitcoin [BTC] and ether [ETH] as attractive bets versus underperforming instruments of traditional finance.
Recognizing the well-developed ecosystem and room for future growth, the government created a regulatory framework for cryptos and stablecoins. The Financial Services and Markets Act 2023 has outlined provisions regarding the regulation of digital assets with the aim of driving mainstream adoption while protecting the interests of investors.
In particular, British Chancellor of the Exchequer Andrew Griffith had previously expressed his intention to turn Britain into a crypto hub.
However, it has not been a smooth ride since the legislation was introduced. Payments giant PayPal suspended crypto transactions in the country until early 2024. This was done to allow time for the necessary improvements to comply with the new rules.
Richard Gardner, CEO of trading technology developer Modulus, told AMB Crypto:
“While regulatory changes often cause a lot of stomachache at the time of implementation, in the long run they actually help the industry grow as long as they are not stifling. Britain is realizing the benefits of an industry that is starting to grow, and I think this should be the goal for countries around the world.”
How the EU wants to grow through MiCA
Outside Britain, the European Union (EU) has also passed the law Crypto Asset Markets (MiCA) earlier this year to make the region more hospitable to crypto activities. MiCA is said to have a single licensing regime to cover all entities operating within the EU jurisdiction.
France welcomed the concept of MiCA and established additional supporting guidelines. According to experts quoted in the report, France’s attitude towards crypto regulation had always been liberal, and the friendlier environment was the main driver of growth.
France, like Britain, had a larger share of crypto activity through DeFi than through centralized exchanges. During turbulent phases such as the fall of the FTX exchanges and the US banking crisis, French customers switched to DeFi even faster than their European counterparts.
Source: Chain analysis