Central, Northern, and Western Europe (CNWE) is establishing itself as a global force in the cryptocurrency market, now second only to North America. According to a recent report by Chainalysis, this region is home to a highly active cryptocurrency economy, recording $987.25 billion in on-chain value between July 2023 and June 2024. This makes up 21.7% of the global transaction volume, underscoring CNWE's significant footprint in the digital asset space.
The UK Leads CNWE’s Crypto Landscape
The United Kingdom stands out as CNWE’s undisputed leader in the crypto market, pulling in $217 billion in crypto value within the year. The UK’s dominance also stems from its role as a hub of crypto innovation, with a strong focus on merchant services and stablecoin solutions. This emphasis on financial technology positions the UK as a primary driver of the region's advancements in crypto infrastructure.
Stablecoins Surpass Bitcoin, Powering CNWE's Crypto Growth
Stablecoins—cryptocurrencies pegged to traditional assets like the euro or US dollar—have become the cornerstone of CNWE’s crypto ecosystem, growing 2.5 times faster than North America in sub-$1 million transfers. Stablecoins now account for nearly half of all cryptocurrency inflows to CNWE, valued at $422.3 billion, highlighting their widespread use for both personal and professional transactions.
Over the past year, monthly stablecoin transfers below $1 million ranged between $10 billion and $15 billion. Notably, stablecoins have also eclipsed Bitcoin (BTC) for fiat currency exchanges, with the euro making up a striking 24% of global stablecoin purchases.
EU Regulation Shapes CNWE’s Crypto Future
The European Union is actively steering the future of crypto within CNWE through its Markets in Crypto-Assets (MiCA) regulation. This regulatory framework is already influencing stablecoin operations, while its full impact on crypto-asset service providers (CASPs) will unfold after the December 2024 compliance deadline.
A Diversified Crypto Landscape Beyond Stablecoins
Despite the prominence of stablecoins, CNWE’s crypto ecosystem is broadening. Bitcoin, for example, experienced a remarkable 75% growth in transactions below $1 million, marking the highest increase among asset types in the region. Overall, Bitcoin accounted for about one-fifth of the total crypto value received in CNWE, indicating sustained interest in the leading cryptocurrency.
Tokenization of real-world assets (RWAs), though still emerging, is gaining traction in CNWE. Industry experts view asset tokenization as a transformative innovation for traditional securities markets. As Philipp Bohrn, Vice President of Public and Regulatory Affairs at Austria-based crypto exchange Bitpanda, observes, "Across Europe, we see RWA tokenization projects emerging, particularly in real estate, intellectual property, and collectibles like art, cars, and wine."
CNWE’s Decentralized Finance (DeFi) Expansion Outpaces Global Average
The decentralized finance (DeFi) sector in CNWE has grown faster than the global average, positioning CNWE as the fourth-largest DeFi market worldwide. CNWE’s DeFi growth rate outpaces that of North America, East Asia, and the MENA region, with $270.5 billion of all cryptocurrency inflows attributed to the region.
Decentralized exchanges (DEXs) have played a pivotal role in CNWE’s DeFi surge, surpassing other DeFi services and acting as a primary catalyst for regional expansion in this innovative financial sector. This trend underscores CNWE’s forward-looking approach to embracing and scaling decentralized financial solutions within its rapidly maturing cryptocurrency landscape.