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Сrypto Adoption in Europe: Is There Any Progress?

source-logo  cryptonews.net 18 March 2024 12:32, UTC
Juan Allan

The use of cryptocurrencies as a means of transaction has grown rapidly around the world in recent years. They are used as a transactional object for various purposes such as payment method, sending money and others.

According to a Chainalysis report, Europe is the second region with the highest volume of cryptocurrency transactions, right behind Asia. Additionally, Europe has the largest number of crypto exchange platforms as well as DeFi projects.

Which countries are leading the adoption of cryptocurrencies in Europe?

The report from Chainalysis claims that Central, Northern and Western Europe (CNWE) was the second largest cryptocurrency economy in the world in 2023. The region accounted for 17.6% of global transaction volume between July 2022 and June 2023 and generated approximately $1 trillion in on-chain value over the same period.

CNWE includes six of the 50 countries with the highest levels of cryptocurrency adoption in the world: the UK, Spain, France, Germany, Italy and the Netherlands.

The number of cryptocurrency users in Europe is expected to increase to 35 million this year, with widespread adoption among younger generations as nearly 60% of millennial investors already own cryptocurrencies.

Similarly, the leading countries for cryptocurrency adoption in Europe include Switzerland, Germany and the Netherlands, which stand out for their high level of technological advancement and early adoption of cryptocurrencies. Europe will grow by 43% year on year.

These data reflect the growing trend towards cryptocurrency adoption in Europe, driven by factors such as technological innovation, a favorable regulatory framework and an informed population willing to accept new forms of financial transactions.

Main factors for the growth of the cryptocurrency market in Europe

Some of the factors that influence the growth and acceptance of cryptocurrencies as a means of transaction in Europe are:

  • Technological Innovation: cryptocurrencies use blockchain technology, which offers advantages such as speed, security, transparency and decentralization of financial transactions. Additionally, the development of new projects and applications based on blockchain and DeFi (decentralized finance) is increasing the demand and supply of cryptocurrency-related services and products.

  • Consumer Demand: Crypto users are seeking alternatives to traditional financial systems, which are often expensive, inefficient or inaccessible. Cryptocurrencies allow users to send and receive money quickly, cheaply and without intermediaries.

  • Favorable regulation: Europe is characterized by taking an active and balanced approach to regulating cryptocurrencies, recognizing their potential and risks. One of the most prominent examples of regulation is the case of the European regulator known as MiCa.

Javier Castro Acuña, Head of Cryptography and Web3 at Bitnovo, said:

“With MiCa, Europe has taken a step forward in the race for regulatory leadership, but it will not be fully operational until 2026. During the transition period, each EU country will adapt to the rules at its own pace, leading to inequality and a lack of competition on a level playing field. Moreover, technology develops much faster than legislation, so if the current MiCa does not already take something into account, in two years the rules will lag even further behind.”

What are the applications of cryptocurrencies as a transaction medium?

Cryptocurrencies are increasingly being used as a means of transaction in Europe. They are offering an alternative to traditional financial services, which are often expensive, ineffective or inaccessible to certain segments of the population.

Crypto assets allow people to send and receive money quickly, securely and cheaply without the need for intermediaries or bureaucratic requirements. In addition, they can facilitate access to credit, savings, investments and financial protection through innovative products based on blockchain technology and smart contracts.

Cryptocurrencies can also act as a means of payment in some places in Europe, allowing users to purchase goods and services with greater ease, flexibility and privacy.

Merchants and businesses are increasingly accepting payments in cryptocurrency, either directly or through payment gateways that convert cryptocurrency into fiat. Likewise, there are cards and mobile apps that allow users to pay with cryptocurrency wherever credit or debit cards are accepted.

It can be concluded that the use and acceptance of cryptocurrencies as a transaction medium for payments and remittances, among other uses in Europe, is growing rapidly and there is more to come.