The United Kingdom becomes the 1st crypto-economy in Europe

 

The UK has become Europe's top "crypto-economy" regarding cryptocurrency trading volume, with the country responsible for $233 billion in cryptocurrency trading volume from July 2021 to June 2022, according to a Chainalysis report published yesterday.

It should be noted that in addition to positioning itself at the forefront of the nations of the European continent, the United Kingdom takes 6th place worldwide.

The report also shows that the country jumped from 21st place last year to 17th place regarding cryptocurrency adoption.

DeFi and NFTs are boosting crypto activity in the UK

Data studied by Chainalysis further suggests that much of the action was related to decentralized finance, given that 20% of European traffic to the websites associated with DeFi or NFT-related NFTs comes from the United Kingdom.

"I'd like to think it's because we've tried to provide certainty when it comes to the regulation and taxation of cryptocurrency in the UK," said Dion Seymour, CTO of Crypto and Assets At Andersen LLP and a former policy adviser to HMRC, the UK tax authority.

He also speculated that another critical factor was that the UK continues to address insufficient consumer protections: "Consumer protection absolutely needs to be addressed if we want DeFi to go mainstream," a- he declared.

Central, Northern, and Western Europe (CNWE) tops the continental rankings

The Chainalysis Global Crypto Adoption Index has further confirmed that on a continental scale, Central, Northern, and Western Europe (CNWE) once again remains the largest crypto economy in the world. The country observed an inflow of cryptocurrencies amounting to $1.3 trillion from July 2021 to June 2022.

Note that Western Europe alone contained six of the 40 largest national crypto-economies in the world, namely the United Kingdom (17th rank), Germany (21st rank), France (32nd rank), Spain (34th rank), Portugal (38th rank) and the Netherlands (39th rank).

Much like the UK alone, as highlighted above, Decentralized Finance (DeFi) and NFTs are responsible for most of this activity. Experts point out that the regulatory clarity the MiCA licensing regime provides favors the entry of cryptocurrencies into Europe.

Finally, while the UK takes first place in terms of volume of crypto activity, it is Germany that shows the most growth in this area, with on-chain activity having increased by 47%

Chainalysis noted that Germany's strong growth is undoubtedly due partly to the application of a 0% tax on long-term capital gains and partly to authorizing many different types of asset managers in the country to invest in cryptocurrencies.