Cryptocurrency adoption in Europe could stop amid a new regulatory framework
In recent years, cryptocurrencies have grown exponentially in the European region. Cryptocurrencies can be used for different purposes, such as investment, trading, savings, or payment methods.
During 2022, the cryptocurrency market faced a complex time following the bear market and the crash of some of the most prominent cryptocurrency players, such as Terra Luna and one of the biggest cryptocurrency exchanges, FTX.
According to Financial Mirror, the European crypto market’s revenue would increase to $9.9 billion this year.
It’s expected that nearly 20% of the increase in market value will come from the UK cryptocurrency market.
Germany is ranked as the second-biggest cryptocurrency market in Europe, with a market revenue of $1.6 billion. Russia is ranked as the third-biggest market in the region, with a market revenue of nearly $1.3 billion.
According to Statista, crypto adoption in the European region will continue to grow, with an expected increase of 43% by 2023.
Currently, more and more companies are offering mixed products using fiat and cryptocurrency services, helping to expand the cryptocurrency adoption in Europe; some companies are now providing payments using crypto and prepaid cards in Europe and helping to develop the crypto adoption in the continent, are the case of Binance and Bitsa Card, among others.
Challenges of regulation and crypto adoption in Europe
A new regulatory framework was recently approved in the European Union known as the Markets in Crypto-Assets Regulation (MiCA).
The new European regulatory framework is set to establish some clear guidelines about financial and compliance regulations in the European region.
One of the first challenges is whether the new regulations could stop the growth of the cryptocurrency ecosystem on the European continent.
One clear example has been the case of one of the biggest cryptocurrency exchanges in the world, Binance, which left Belgium and the Netherlands due to some internal regulations related to compliance.
Some experts state that new regulations could help companies in the cryptocurrency industry have more precise guidance about what kind of obligations and rights they could have and, hence, have a brighter path for growing.
On the other hand, another position states that the regulation could stop the current growth of the cryptocurrency ecosystem.
Regulations protect consumers from scammers and power abuse from different crypto industry companies. Also, local players within the crypto industry in different jurisdictions must understand that regulations can help them better understand their financial, tax, and compliance obligations. However, local regulators must understand that the law must be applied using a rational standard, avoiding abuse of power. One recent case of abuse of power by regulators could be the actions taken by the SEC against Binance and Coinbase in the US. At the time of writing, the author held the following position: John Allan – Currently Communications & Media Manager.
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The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.