- DeFi fuels CNWE’s crypto adoption, constituting a remarkable 54.8% of the total crypto value received.
- The UK stands out with $252.1 billion in crypto transactions, ranking third globally.
- The European Union’s MiCA Regulation unifies crypto regulation across EU countries, fostering a secure environment for crypto activities.
A recent report by Chainalysis revealed that Central, Northern, and Western Europe (CNWE) have emerged as the second-largest cryptocurrency economy globally, outpaced only by North America. The report, covering the period between July 2022 and June 2023, unveiled that CNWE accounted for 17.6% of the total global cryptocurrency transaction volume, receiving an estimated $1 trillion in on-chain value during the same period.
Decentralized Finance (DeFi) has emerged as the driving force behind the crypto adoption surge in CNWE, constituting 54.8% of the total cryptocurrency value received in the region. The report noted that the surge is facilitated by decentralized exchanges (DEXes) and regulatory frameworks supporting diverse web3 initiatives.
The UK stands out as the epicentre of CNWE’s crypto economy, ranking third globally in terms of raw transaction volume, with an estimated $252.1 billion received in the past year. According to Jamie McNaught, Founder and CEO of U.K.-based crypto exchange Solidi, British consumers have embraced crypto both from a technological and investment perspective. He cited,
Customers in the U.K. 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 favor, 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.
In a significant move, the European Union’s approval of the Markets in Crypto-Assets (MiCA) Regulation in June 2023 has paved the way for unified regulation of crypto activities across all EU countries. MiCA aims to promote financial stability and market integrity by establishing a single licensing regime supervising public offers of crypto assets, trading, and digital asset institutions. This regulatory shift has created favorable environments for crypto innovation in countries like France, Italy, and Germany.
France has embraced crypto innovation wholeheartedly, with supportive regulatory frameworks dating back to the 2019 PACTE Act. Also, Germany’s robust historical background in technical blockchain development, coupled with reliable regulation, has positioned it as a stronghold for crypto growth. The introduction of the Future Financing Act (“ZuFinG”) in April 2023 has paved the way for institutional developments, with initiatives like Deutsche Bank’s partnership with Taurus and the German-Dutch central banks’ “Project Atlas” mapping on-chain transactions.
