Crypto is on the march in Europe, with Central, Northern, and Western Europe (CNWE) representing the second-largest market in 2023 behind North America, according to Chainalysis. Meanwhile, Eastern Europe captured 8.9% of the total global crypto value received in the year to June 2023, with Ukraine sitting highest (fifth) among all European nations in Chainalysis' 2023 Global Crypto Adoption Index.
The driving forces for crypto adoption across Europe vary significantly by nation. Hedging against rising inflation — one of crypto's most touted uses — is one key catalyst, alongside robust pan-European Markets in Crypto Assets Regulation (MiCA), supportive governments, and informed populations. These factors have helped the region to make noteworthy progress towards more comprehensive infrastructure and, ultimately, wider adoption.
According to Chanalysis, the region accounted for 17.6% of global transaction volume between July 2022 and June 2023. And, Euronews predicts that 2024 will see the end of the 'no coiner'. With 2024 also primed to bring major developments for crypto regulation across the region, which nations are leading the way?
Read on as we explore five of the leading countries in Europe for crypto adoption.
Netherlands
It's fitting that the country credited with opening the first stock exchange in 1602 should also be an enthusiastic adopter of the financial system's latest significant rewrite. The Netherlands has diligently earned a reputation as being among Europe's most crypto-friendly nations — known for its robust yet transparent regulatory environment.
Although crypto companies aiming to operate in the country must pass strict requirements, that's a major reason why the sector is flourishing. A high regulatory bar keeps lax exchanges out of the market, protects users, and preserves the integrity of the crypto sector at large.
Eager to capitalize on the nation's growing enthusiasm for crypto, we rebranded Okcoin Europe Ltd. to OKX in Europe. At the time of writing, a beta version of the OKX platform is available in the Netherlands, and we're working towards an official launch in the future.
What's driving the Netherlands' crypto growth?
The desire of FinTech companies to innovate and find better ways to invest, spend, and save is complemented nicely by the willingness of the Dutch to embrace innovation. A July 2022 study found that almost 2 million Dutch residents held crypto — around 14% of the population — with Bitcoin being the most popular asset. Meanwhile, the nation has been dubbed the most crypto-curious, owing to its residents making the highest number of crypto-related internet searches in 2023. Evidently, residents' interest in crypto has translated into action, helped by a strict regulatory framework that brings much-needed trust to the space.
As exchanges and wider crypto entities enjoy a supportive environment, the wider FinTech space is progressing at pace. The total number of deals in the sector reached 75 in 2022 — up from 67 in 2021 — and blockchain and crypto companies attracted the second-largest share of deals with 12 in total. Overall, the Netherlands has the highest adoption rate for FinTech among the leading economies of the world, nurturing companies that are placing the next bricks in crypto's growth.
These factors explain why the crypto market is expected to reach $674.6 million in 2024 and $880.3 million by 2028.
Opportunities and challenges ahead
The roll out of the MiCA in 2024 should bring greater legal certainty to Europe's crypto sector and potentially attract greater inflows of investment into the space. For a nation as open to crypto and blockchain growth as the Netherlands, MiCA's arrival represents a major opportunity. More exchanges will likely have their heads turned towards the Northern European state as a new frontier for growth, bringing fresh innovation and new gateways into crypto.
However, some commentators would argue that MiCA's comprehensive regulatory requirements add another barrier to new market entrants, which could slow competition and hamper adoption. Alongside MiCA, Dutch exchanges must also meet the obligations of the 5th EU Anti-Money Laundering Directive (5AMLD), introduced by European Parliament in April 2018 to tackle money laundering and terrorist financing.
Ukraine
Ukraine's crypto journey was diverted when war with Russia broke out in early 2022. Since then, the Eastern European nation's crypto priorities and progress have shifted in response to the new reality.
Despite a protracted conflict, the nation's crypto adoption remains strong, with Ukraine sitting fifth on Chainalysis' 2023 Global crypto Adoption Index. Although the 2023 ranking marks a fall from third place in 2022, crypto and blockchain technology seemingly still has a key role to play in Ukraine's financial future, as indicated by its long-term plans.
What's driving Ukraine's crypto growth?
Although the onset of war accelerated the arrival of formal crypto regulation in Ukraine, the country's move towards virtual asset adoption was already well underway. A bill to legalize and regulate cryptocurrency was put forward in 2020 and almost unanimously passed in late 2021, paving the way for regulation to become effective in March 2022 — mere weeks after the war began. That allowed millions in crypto donations to flow into Ukraine to be converted into vital fiat funds.
Prior to 2022, Ukrainians were among the most active retail users of digital currencies according to Chainalysis data, owing in large part to its tech-native population. And a 2022 study found that 15% of Ukrainians owned crypto, totaling around 6.5 million people. Meanwhile, the nation has been diligently growing a solid blockchain developer community and attracting millions in funding for crypto startups based within its borders. Although Ukraine's future is currently mired in uncertainty, its investment to date in creating a supportive and well-regulated crypto ecosystem could prove invaluable. The speed and secure nature of crypto payments, plus a respected and in-demand blockchain developer community, could be essential resources as Ukraine rebuilds.
Opportunities and challenges ahead
While the opportunity for Ukraine is clear — a crypto-friendly government as of 2024, high existing virtual asset adoption, and a skilled Web3 workforce — concerns have been raised over regulation. Specifically, the country's implementation of MiCA, Europe's Markets in Crypto Assets Regulation.
June 2022 saw the 27 member states of the European Union (EU) grant Ukraine status as a candidate for membership. As a result, Ukraine's national legislation would be adapted to the pan-European standard, including crypto regulation — meaning MiCA. However, as the country isn't yet a full EU member, it can't adopt one key facet of MiCA: "passporting rights". Passporting rights allow crypto service providers authorized in one EU member state to operate throughout the entire EU without needing to comply with each state's individual regulations. Without this access, Ukraine may appear less attractive to crypto companies looking to expand across Europe.
Of course, Ukraine has much bigger concerns than MiCA regulation in the present moment. However, many would agree that crypto is poised to play an important role in both its present and future.
France
France's financial landscape has seen significant evolution in recent years, and crypto has been a major benefactor. Around 6.5 million French people, or 12% of the population, currently hold crypto assets — up from 9.6% in 2023. The same study found that just under one quarter of respondents who don't hold assets would consider doing so in the future.
Significantly, support for the sector has come from the very top of France's financial structure. In an October 2021 speech, Robert Ophèle, the Chairman of the Autorité des Marchés Financiers (AMF), which protects the interests of investors and oversees the country's financial markets, acknowledged the massive potential of virtual assets:
"We realised very early on that the digitalization of assets and use of distributed ledger technology were major sources of innovation that needed to be supported and even encouraged."
What's driving France's crypto growth?
France was an early mover toward the regulation of virtual assets on the continent. The nation's PSAN licensing scheme, which holds digital asset service providers to strict anti-money laundering (AML) and counter-terrorist financing (CTF) regulations, predates MiCA with its 2019 arrival.
Meanwhile, France has for a long time been considered a supportive jurisdiction for crypto traders and service providers. In 2021, President Macron announced a $30 billion 2030 plan with the ambition to create France's "high tech champions of the future." Macron also previously declared Web3 "an opportunity not to be missed."
The positive narrative around virtual assets has led major industry players onto French shores to meet a growing demand among traders and Web3 natives. OKX was granted our license to operate in France in December 2023, following the incorporation of OKX France in April of the same year.
Opportunities and challenges ahead
Many crypto traders and service providers will be looking to France and hoping for more of the same. That is, strict but transparent regulation, a supportive leadership, and further investment, such as the pioneering €100m Web3 fund from Ledger Cathay Capital — the first to come out of France.
One question that's yet to be answered is how MiCA will influence the competitive landscape in Europe, and how this might impact the pace of crypto adoption in France. However, the strength of the nation's crypto space puts France in a prime position to overcome any barriers ahead and see further growth.
United Kingdom
The U.K. has the largest crypto economy of all CNWE nations and ranked third globally for transaction volumes, according to Chainalysis' 2023 study. The nation shares a similarly supportive regulatory environment with its neighbors France, while London was named the most crypto-ready city for business in 2023.
With a solid foundation of regulation, infrastructure, and interest, the U.K. is well placed to see its crypto adoption grow through 2024 and beyond.
What's driving the U.K.'s crypto growth?
Although relatively complex and still taking shape, the U.K.'s crypto regulation framework, which is overseen by the Financial Conduct Authority (FCA), has helped nurture rather than slow the industry. Where the FCA requires crypto firms to register and prove they meet the required anti-money laundering safeguards, the U.K. Advertising Standards Agency (ASA) regulates the promotion of cryptoassets to consumers.
This firm but fair environment has encouraged an increasing number of crypto companies worldwide to step into the market and offer their services, opening new doors to committed traders and those interested in diversifying their assets. As a result, 11% of Brits — around 5.6 million people — have invested in cryptocurrency as of 2024.
Progress towards the wider adoption of virtual assets for financial innovation has also been announced. In late 2023, the government put forward a proposal on a regulatory regime for a payments system that uses stablecoins. Although the idea of a sterling-backed stablecoin raises questions around centralization, the implementation of a payment chain backed by a virtual asset could introduce more of the population to crypto's various use cases.
Meanwhile, in March 2024, the FCA approved the launch of crypto-backed exchange-traded notes (ETN) for compliant investment firms and credit institutions. Although a ban on ETNs for retail traders remains in place, the move opens the door to wider institutional adoption in the U.K..
Opportunities and challenges ahead
The U.K. must hold a general election by no later than January 28, 2025, which could signal the end of the Conservative party's 13 years in power. With the Labour party representing the only realistic alternative, commentators have explored what this political change could mean for Britain's crypto progress. The signs point to a similarly supportive regime.
The Labour party has stated its intention to make the country a hub for securities tokenization and plans to promote a digital pound. The party has also stressed its intention to embrace FinTech and "provide a secure policy platform for growth" of the financial sector.
Spain
Spain has taken major strides in recent years to accelerate the emergence of its crypto industry, from moving forward with the implementation of MiCA to encouraging the widespread adoption of cryptocurrency payments. What's more, the nation is competitive on the continent for its crypto-friendly regulations, and has actively encouraged education in all things crypto for individuals and businesses. Impressive progress has also been made to bring crypto into everyday life — a major hurdle to accelerated adoption.
The country ranked twenty-second in Chananalysis' 2023 Global Crypto Adoption Index, with plenty of opportunity for progress.
What's driving Spain's crypto growth?
Although Europe can count numerous crypto-friendly jurisdictions, Spain appears especially eager to drive the mainstream adoption of digital assets by normalizing the day-to-day use of crypto.
Torrevieja in Spain's Alicante province has set out to become the first crypto friendly city in Europe through the widespread acceptance of cryptocurrency payments across retailers. Blockchain technology will be applied to digitize commerce for the city, and the project's first phase will focus on promoting cryptocurrencies as a transactional medium. What's more, merchants can also access educational courses via the University of Alicante to support the integration of crypto payments into their operations.
Torrevieja's ambitions reflect the wider emergence and acceptance of crypto in Spain. In 2022, the country surpassed Bitcoin maximalists El Salvador for the number of Bitcoin ATMs in the country with 215. Meanwhile, Barcelona-based low-cost airline Vueling announced in early 2023 that it would allow customers to pay for their tickets using cryptocurrencies.
The rise in registered crypto companies in recent years underlines the progress made towards grassroots adoption of crypto for Spain. The country reportedly saw a 56% increase in registered companies in 2023, and domestic brands make up the majority of virtual asset providers at 61 out of 85. Many global virtual asset providers are also present, creating a competitive and robust ecosystem to support users.
Opportunities and challenges ahead
Spain's crypto framework is arguably a solid blueprint for other nations to follow. MiCA has been embraced and its implementation brought forward to strengthen the sector and protect users much sooner. Meanwhile, real-world use cases are underway, and their success could prompt other Spanish cities and towns to follow with deeper support for traders, consumers, and merchants. This could create a groundswell of momentum that sees the nation pull ahead of others for the normalized use of virtual assets and their underlying technology.
A 2023 report found that 60% of Spanish residents plan to buy crypto and hold it for the long-term, while 35% already use crypto to make payments. This, combined with the regulatory reality and the platforms available to Spaniards, suggests the industry has a sustainable future ahead.
The final word
Overall, Europe is a highly competitive crypto market internationally, helped by the pan-regional influence of MiCA regulation and the openness of many governments to trading and tokenization. Although regulatory requirements are challenging to meet, the providers that do succeed will find a user base that's eager to embrace digital assets whether for trading, payments, or wider utility.
Meanwhile, plenty of local nuance is seen, with many of the top European nations for adoption presenting specific opportunities across the myriad use cases for Web3 technology.
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