Published on February 3rd, 2021
Cryptocurrency is a decentralized digital currency that is not controlled or regulated by any single government. For this reason, it is gaining popularity around the globe. Crypto has long been popular in Asia and its popularity has been growing steadily in both North and South America.
Cryptocurrency’s popularity in Europe has developed more slowly than on other continents. Several challenges that it has faced had previously impacted its growth in the region. However, the popularity of crypto is now steadily growing throughout Europe.
Here we’ll look at some of the challenges presented by the European Union (EU) that slowed crypto’s acceptance, how crypto overcame them, and how its popularity is growing amid the development of favored European exchanges for cryptocurrency.
The European Union
The European Union has been the biggest hindrance to the widespread popularity of crypto in the region. The continental governing body has produced multiple rulings in the last few years that have made it difficult or impossible for certain types of crypto to flourish.
One such ruling was that the EU outlawed private digital currencies in its jurisdiction. This is one of the biggest issues that Facebook’s Libra cryptocurrency has faced and a major reason it still hasn’t launched.
In a move made to preserve the EU’s current financial status quo, the Court of Justice of the European Union also decided that no European government could launch its own cryptocurrency. However, the Court of Justice declared in this same ruling that exchanging crypto for fiat currency should not be taxed.
Taxation is another issue that has helped crypto popularity in certain parts of the EU. The EU does not tax crypto transactions, but any individual member state within the EU may, if it chooses to.
As a result, the tax rates vary wildly from country to country in Europe. Some member states have no tax on crypto while others tax it at rates as high as 50%.
A bright spot on the EU front that has increased crypto’s popularity in Europe is that the EU has looked into creating its own crypto.
In 2019, the European Central Bank held a meeting to decide if it should issue its own digital currency in response to Facebook’s Libra, thereby forestalling risky crypto projects in the region while also taking steps to use the technology to better secure the EU and its Central Bank’s financial future.
Pockets of Popularity
Although some of the EU’s actions have slowed the growth of crypto’s popularity, it has nevertheless been trading all around the continent.
According to the Forbes Magazine list of cities around the world that are the biggest Bitcoin hotspots, half of the top 10 are in Europe. They include Prague (1), Madrid (4), Amsterdam (6), London (9), and Paris (10).
Of the countries with the highest percentage of the population saying they have used or owned crypto, Turkey and Spain are both ahead of China and the U.S., two countries thought of as crypto leaders. Germany is right behind these two powers and ahead of another leading crypto country, Japan.
Another contributing factor to the rise of crypto in Europe is the availability of exchanges to trade on. The first European crypto exchange was Paymium, founded in 2011. The exchange is still active today and allows users to trade Bitcoin and altcoins using the Euro.
Bitstamp is probably the most well-known exchange founded in Europe. The popular platform now operates out of the UK and Luxembourg but was founded in the relatively small Eastern European capital city of Ljubljana, Slovenia whose population is less than 300,000.
Several other crypto exchanges are based in Europe as well. Trading platforms like Kriptomat (Estonia), Coinmama (Ireland), CEX.io (England), Bitpanda (Austria), and Bity (Switzerland) are all popular exchanges that call the continent home. The Israeli exchange eToro is also popular in Europe, with offices in both London and Limassol, Cyprus.
But the biggest worldwide exchanges are also the biggest in Europe. Coinbase and Kraken are both widely available in Europe.
Kraken has no restrictions for European countries and Coinbase is available in 41 of the 44 countries on the continent. This guide from Cove Markets further explores two of the most popular exchanges for European traders.
The most popular crypto coins and tokens have largely been created in North America thus far.
Bitcoin, Ethereum, Ripple, Dash, and more have all emanated from this part of the world. Several Euro-based cryptocurrencies today, though, are beginning to challenge their North American counterparts.
IOTA is a collaboration between Norwegian and Italian entrepreneurs. This crypto is based on the Internet of Things (IoT) as opposed to blockchain because of the potential for increased scalability.
The Swiss company Lisk has the LSK token which became one of the most successful crowdfunding campaigns in history.
The token seemingly had Bitcoin-like potential, quickly rising in price from nothing to $33 per token in 2018 but has since come crashing back down, trading at just over $1 throughout 2020.
The popularity of cryptocurrency trading is growing in Europe. While the European Union had taken some steps to tamp down on crypto, other EU actions have helped grow crypto’s popularity. In addition, the EU is looking into the technology as something it can get behind.
Crypto is as, if not more, popular in some parts of Europe as anywhere else in the world. Much of this is owed to European-based crypto exchanges and the growing access to popular US-based platforms like Kraken and Coinbase.
This has not only inspired Europeans to trade and use crypto more but also to create cryptocurrencies of their own.
As the 2020s continue, it seems like interest and adoption of cryptocurrency in Europe will continue to grow. By the end of the decade, if not sooner, Europe will take its place with Asia and North and South America as a leader in the field.