Central, Northern, and Western Europe: A Rising Powerhouse in the Global Cryptocurrency Market
Central, Northern, and Western Europe (CNWE) is emerging as a global powerhouse in the cryptocurrency market, ranking second only to North America.
A recent report from Chainalysis reveals a thriving crypto economy in the region, with $987.25 billion worth of on-chain value transferred between July 2023 and June 2024. This accounts for 21.7% of the global transaction volume during that period.
The United Kingdom Leads the Way
The United Kingdom (UK) stands as the undisputed leader in CNWE’s cryptocurrency sector, attracting a staggering $217 billion in crypto value within the specified time frame. The UK is also a key driver of innovation, particularly in trading services and stablecoins.
Stablecoins Overtake Bitcoin in Driving CNWE Crypto Growth
Stablecoins, which are cryptocurrencies pegged to traditional assets like the Euro or US Dollar, have emerged as the dominant force in CNWE. Transfers under $1 million are growing 2.5 times faster in CNWE than in North America. Stablecoins account for nearly half of all crypto inflows, totaling $422.3 billion, indicating a sharp rise in both private and institutional use.
In the past year, the average monthly stablecoin transfers under $1 million in CNWE ranged between $10 billion and $15 billion. Notably, stablecoins have surpassed Bitcoin (BTC) in fiat trading, with the Euro representing a significant 24% of global stablecoin purchases.
Europe’s Role in Shaping Crypto Regulation
The European Union is actively shaping the future of cryptocurrency in CNWE through the implementation of the Markets in Crypto-Assets (MiCA) regulation. While MiCA's impact on stablecoins is already evident, the full effects on Crypto-Asset Service Providers (CASPs) are yet to unfold, with regulations for this sector set to take effect in December 2024.
Beyond Stablecoins: CNWE’s Expanding Crypto Landscape
Although stablecoins dominate, CNWE’s crypto landscape is broadening. Bitcoin saw a notable 75% growth in transactions under $1 million, the highest of any asset in the region. Overall, Bitcoin accounted for about one-fifth of the total crypto value in CNWE.
Real-World Asset (RWA) tokenization, though still in its infancy, is gaining traction in CNWE. Experts see it as a potential game-changer for traditional securities markets. "Across Europe, we are seeing tokenization projects for RWAs gaining momentum, particularly in sectors like real estate, intellectual property, and collectibles like art, cars, or wine," said Philipp Bohrn, VP of Public and Regulatory Affairs at Bitpanda, a cryptocurrency exchange based in Austria.
The Growth of Decentralized Finance (DeFi)
CNWE’s decentralized finance (DeFi) activities grew faster than the global average, ranking fourth in the world. The region outpaced North America, East Asia, and the MENA region in year-over-year growth, with DeFi transactions totaling $270.5 billion in the region.
Decentralized exchanges (DEXs) were the main drivers of DeFi growth in CNWE, surpassing other DeFi services.
As CNWE continues to expand its influence in the global cryptocurrency landscape, its strong regulatory framework, rising adoption of stablecoins, and advancements in DeFi and tokenization position the region as a critical player in the future of crypto.
