According to an official report published this morning, the UK received a whopping $233 billion in gross cryptocurrency transaction value from July 2021 to June 2022.
This was the highest crypto transaction value of any European country.
The country also jumped in the cryptocurrency adoption index, moving from 21st last year to 17th in today's Chainalysis report.
The highly anticipated annual document ranks the UK as the world's sixth largest crypto transaction value.
Chain analysis reveals that much of the activity was DeFi-related, with nearly 20 percent of web traffic to NFT and contract-related websites in Europe coming from the UK.
The UK crypto market was also the only top five Western European country to grow in terms of gross on-chain transactions in each quarter from July 2021 to July 2022.
This suggests that the rate of adoption of cryptocurrencies has been more resilient in the UK than elsewhere in Europe – a view supported by Dion Seymour, technical director of crypto and digital assets at Andersen LLP and a former policy advisor at HMRC, the UK tax authority.
"I'd like to think it's because we've tried to provide certainty in terms of crypto regulation and taxation in the UK," he said.
"Nobody wants to see cryptocurrencies taxed, but if there's uncertainty about how they're going to be taxed, that can also cause some consternation."
Seymour also believed that an important factor was that the UK continued to deal with insufficient consumer protection.
“If we want DeFi to become mainstream, it is absolutely necessary to consider consumer protection,” he added.
"This year will continue to see many conversations between policy makers, the World Bank, the World Economic Forum, the OECD, the HMT, the FCA and of course HMRC."
Central, Northern and Western Europe (CNWE) once again topped the Chainalysis Global Crypto Adoption Index this year as the world's largest crypto economy. Users and institutions across the region received $1.3 trillion worth of cryptocurrency between July 2021 and June 2022, and Western Europe alone contained six of the top 40 local users of cryptocurrency: the United Kingdom (17), Germany (21), France (32), Spain (34), Portugal (38) and the Netherlands (39).
DeFi and NFT protocols continued to drive much of this activity, with EU regulations such as the Cryptocurrency Travel Rule and the MiCA licensing regime providing greater regulatory clarity.
Most of the top ten crypto markets in CNWE saw on-chain activity grow at a rate of 1-30% year over year. However, two outliers stood out: Germany, which saw activity increase by 47%, and the Netherlands, which saw activity decrease by 3%.
Germany's excessive growth was likely a byproduct of two recent decisions: (1) to push for a 0% tax on long-term capital gains and (2) to allow many different types of asset managers to invest in cryptocurrencies. Chain analysis data suggests that these moves have had the effect of encouraging both retail and institutional adoption. Dutch regulators, on the other hand, chose a more cautious tone.
In the smaller CNWE countries, changes in on-chain activity varied to a much greater extent. At the poles are Estonia, whose activity has increased by 76%, and Malta, whose activity has halved over the period under review.
Malta faced increased competition from July 2021 to June 2022 as countries such as the Bahamas and Bermuda and jurisdictions such as Abu Dhabi and Dubai stepped up their efforts to attract cryptocurrency startups to their region. However, the “blockchain island” still has one of the most complex regulatory frameworks in the world. Meanwhile, Estonia has seen rapid success in its ambition to become a Central European crypto hub, turning its attention to reducing the risk of money laundering, ransomware and market contagion in May 2022.
NFTs manage Defi, activity among CNWE citizens
DefiDefi is also popular elsewhere in the CNWE, and NFT platforms are leading the way, driving the most web traffic of any other type of DeFi protocol in the region. This is especially true in Ireland and Norway, where NFT marketplace traffic accounts for more than 70% of all DeFi-related web traffic.
Blockchain gaming was the second most visited DeFi category at CNWE, with France, Italy and Spain leading the way. In these three countries, more than 30% of web traffic was related to the meta version.
Cutting edge
In addition to being the largest cryptocurrency market in the world, CNWE has always been at the forefront of the cryptocurrency world – a big example being the region's embrace of DeFi. As new crypto technologies and use cases emerge, it remains to be seen whether CNWE will maintain its early adopter status.
0 Comments