UK is the largest crypto economy

Written by Pooja Sharma

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How does it work?

New research released by blockchain data platform Chainasis confirms that the UK is the largest cryptocurrency economy in Central, Northern and Western Europe (CNWE). The UK is ranked 12th and has risen two places since 2023 in Chainasis’ Global Cryptocurrency Adoption Index, with the UK receiving $217 billion in on-chain cryptocurrency value between July 2023 and June 2024.

Merchant services are thriving and are a key aspect of the UK’s growth. CNWE has the second largest commercial services market in the world after Central and South Asia and Oceania (CSAO), driven by 58.4% annual growth in the UK. Stablecoins are the most widely used asset type in these services, consistently accounting for 60-80% of the market share each quarter.

Commenting on the report, Jordan Wynne, UK Public Policy Leader at Chainalysis, said: “The UK’s current position in the global adoption of digital assets is encouraging given the recent headwinds and obstacles. The progress the country has made compared to its other European neighbours, when taking into account the recent government shift and the general slowdown in regulatory policy development, is notable. The UK has a huge opportunity To leverage high levels of grassroots adoption to drive growth of the sector, it is important that the Labor government leverages these drivers of success to ensure that the UK positions itself as a global leader in this area, and that, like its initiatives around other frontier technologies, it is recognised. With blockchain technology and digital assets and supporting them as a real basis for national growth.”

Who is under the radar?

CNWE’s crypto activity is growing overall

Outside of the UK, Central, Northern and Western Europe (CNWE) is generally the second largest cryptocurrency economy in the world after North America, receiving $987.25 billion in on-chain value between July 2023 and June 2024, representing 21.7% of global transactions. Amount. Most countries in the CNWE have seen growth in cryptocurrency activity, with the average growth rate reaching 44% year-on-year (YoY). After the UK, Germany ($125.3 billion), France ($101.2 billion), and the Netherlands ($83.3 billion) had the highest amounts of on-chain value in CNWE between July 2023 and June 2024.

CNWE’s market share is dominated by stablecoins

For transfers below $1 million, CNWE saw stablecoin volume growth 2.5 times greater than North America. The value of CNWE’s stablecoin across all transaction sizes represents nearly half of all cryptocurrency flows ($422.3 billion USD). Although flows decreased in May and June of 2024, the share of stablecoin transactions increased, indicating strong usage despite the market decline after the rally. Over the past two years in the CNWE, stablecoins have dominated other asset types, with an average share of 52.36% of transactions across asset types between July 2022 and June 2024. However, it remains to be seen how the European Union (EU) markets will impact the currency regime. The stability of the Crypto Assets Regulation (MiCA) and December’s regulatory impacts on Crypto Asset Service Providers (CASPs) will fully affect the region.

Commenting on the dominance of stablecoins at CNWE, Matthias Bauer-Langartner, Head of Policy for Europe at Chainalogy, said: “Our data shows that stablecoins are currently the largest and fastest growing use case for crypto assets in Central, Northern and Western Europe. As MiCA’s stablecoin regulatory regime continues to be fully operational, and as further legislation comes into force, it is important that the EBA and the Securities and Markets Authority In improving any ambiguous aspects of regulation to ensure that they do not unnecessarily impact the momentum we are seeing in the region, better clarity will be needed to ensure that all stakeholders, including regulatory bodies, are able to continue to navigate the new regulatory landscape effectively. And enhance A thriving but equally robust and secure crypto-asset market.”

Why does it matter now?

In Eastern Europe, institutions and decentralized finance (DeFI) are fueling the growth of cryptocurrencies

Despite the war and regulatory issues in this part of the region, Eastern Europe is the fourth largest cryptocurrency market globally, receiving $499.14 billion in on-chain value between July 2023 and June 2024. Centralized exchanges (CEXes) received the largest number of coins Cryptocurrency in the region stands at approximately $324 billion, and DeFi activity has grown significantly in the past year with $165.46 billion worth of cryptocurrencies, a third of the region’s total volume in Area. Inflows.

This year Global Crypto Adoption IndexUkraine and Russia, the two regional leaders, ranked sixth and seventh respectively, with Russia moving up six places from last year. classification. Cryptocurrency markets in both countries are thriving despite the ongoing war and intense international sanctions regime against Russia, which led Eastern Europe with $182.44 billion in cryptocurrency inflows, as seen below. Ukraine followed, receiving $106.1 billion in cryptocurrencies.