Central, Northern, and Western Europe (CNWE) is rapidly establishing itself as a dominant force in the global cryptocurrency landscape, second only to North America.
Robust Growth in Crypto Economy
A recent Chainalysis report highlights a thriving crypto economy in CNWE, with an impressive on-chain value of $987.25 billion recorded between July 2023 and June 2024. This figure accounts for 21.7% of the worldwide transaction volume.
The United Kingdom’s Dominance
The United Kingdom (UK) has emerged as the clear frontrunner in CNWE’s cryptocurrency sector, attracting a remarkable $217 billion in crypto value during the reported period. The UK also plays a pivotal role in fostering innovation, particularly in merchant services and stablecoins.
Stablecoins Drive Crypto Expansion
Stablecoins, digital currencies linked to traditional assets such as the euro or US dollar, have taken the lead in CNWE. These assets are growing 2.5 times faster than those in North America for transactions under $1 million, comprising nearly half of the region’s crypto inflows, valued at $422.3 billion. This reflects a notable increase in both retail and institutional usage.
In the past year, monthly stablecoin transfers under $1 million in CNWE fluctuated between $10 billion and $15 billion, indicating a robust market presence.
Significant Market Trends
Notably, stablecoins have surpassed Bitcoin (BTC) for fiat currency trading, with the euro representing an astounding 24% of global stablecoin acquisitions.
The European Union is actively influencing the cryptocurrency landscape in CNWE through its Markets in Crypto-Assets Regulation (MiCA). While some effects on stablecoins are evident, the full impact on crypto-asset service providers (CASPs) will become clearer once new regulations take effect in December 2024.
Diverse Crypto Landscape in CNWE
Beyond the rise of stablecoins, CNWE’s cryptocurrency environment features a range of assets. For transactions below $1 million, Bitcoin experienced a notable 75% increase, marking the highest growth rate among asset types in the region. Bitcoin represents about one-fifth of the total crypto value received in CNWE.
Real-world asset (RWA) tokenization is also beginning to gain traction in CNWE. Experts believe this trend could revolutionize traditional securities markets. Philipp Bohrn, VP of Public and Regulatory Affairs at Austrian cryptocurrency exchange Bitpanda, noted, “Across Europe, we see tokenization projects for RWAs gaining traction, particularly in sectors such as real estate, intellectual property, and collectibles like art, cars, or wine.”
Growth of Decentralized Finance (DeFi)
The decentralized finance (DeFi) sector in CNWE is expanding faster than the global average, placing it fourth worldwide. This region has outpaced North America, Eastern Asia, and MENA in year-over-year growth, with $270.5 billion in total crypto received.
Decentralized exchanges (DEXs) have played a crucial role in driving DeFi growth in CNWE, surpassing other DeFi services, which have seen varying levels of inflow, including NFTs, bridges, and lending.
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