The adoption of cryptocurrencies in the UK is growing as the country adopts regulatory frameworks for digital assets and stablecoins, according to a study released by Chainalysis.
The UK has emerged as a major global cryptocurrency powerhouse and the country with the highest gross transaction volume in Central, Northern and Western Europe (CNWE), according to a new study by Chainalysis.
The blockchain data analysis company released two new chapters of the “Geography of Cryptocurrencies 2023” report on October 18, including its new study on CNWE and the second edition dedicated to Eastern Europe.
According to the CNWE-focused report, the region became the second largest economy in the global cryptocurrency market last year, behind North America. The region accounted for 17.6% of the global volume of transactions carried out between July 2022 and June 2023, and handled an estimated $1 trillion on-chain during that period.
The United Kingdom tops the CNWE’s list of the largest cryptocurrency markets and also came third worldwide in terms of transaction volumes, behind the United States and India. According to Chainalysis, the UK handled an estimated $252.1 billion worth of cryptocurrency transactions last year.
Other major regional powers in the cryptocurrency market are Germany and Spain, which handled around $120 billion and $110 billion in cryptocurrencies last year respectively. These countries are followed by France, the Netherlands, Italy, Switzerland and Sweden, among others.
Some market analysts have previously suggested the growing adoption of cryptocurrencies in the UK. In February, cryptocurrency tax platform Recap reported that London was the most prepared city to host cryptocurrency-related businesses in the world, beating Dubai and New York.
The high level of cryptocurrency adoption in the UK comes amid the implementation of a series of regulatory frameworks on the cryptocurrency industry and market. The UK government has been steadily progressing towards the adoption of the Financial Services and Markets Act, which includes a definition of crypto-assets to the country’s existing financial services legislation, as well as providing a regulatory framework for stablecoins such as Tether (USDT).
In October 2023, the UK’s Financial Conduct Authority implemented the Financial Promotions Regime, setting a regulated standard for cryptocurrency companies to promote their activities without harming investors. Previously, in September 2023, the UK had also adopted the UK cryptocurrency “Travel Rule”, requiring cryptocurrency companies operating in the UK to collect, verify and share certain information about certain crypto-asset transfers.
In addition to the CNWE report, Chainalysis also released a detailed report on Eastern Europe, which is the fourth largest global cryptocurrency market by volume transacted, according to the company. The region moved $445 billion in cryptocurrencies between July 2022 and June 2023, which represents 8.9% of the global total of transactions made during the period analyzed.
Chainalysis did not immediately respond to Cointelegraph’s request to clarify details about the methodology of the study and what types of transactions involving cryptocurrencies were included in the analysis. This article may be updated if Chainalysis provides new information.