The United Kingdom has been included in The 2022 Global Crypto Adoption Index Top 20, a study done by Chainalysis. This is interesting since London, the country’s capital, is considered to be one of the world’s leading and oldest financial hubs. Are Britons starting to embrace digital assets despite having access to traditional investment and monetary tools?
The 2022 Global Crypto Adoption Index Top 20 was done by Chainalysis, a blockchain analysis firm based in New York. This report was dominated by emerging economies, because crypto is used as a tool in places where banking services are expensive, limited, or non-existent. The UK and the US were the only two high-income countries on the list and most of their residents have access to financial instruments.
Britons have choices when it comes to financial institutions. HSBC Holding, Llyods Banking Group, and Barclays are just some of several financial giants that are headquartered in London.
Is the United Kingdom Crypto Friendly?
The UK ranks 6th in raw crypto transaction volume worldwide, with $233 billion received from July 2021 to June 2022. A big chunk of this activity is DEFI related. This makes the country the largest DEFI (Decentralized Finance) district.
The United Kingdom’s crypto market was also the only one that grew within the top 5 Western European countries.
Cryptocurrency Report
This suggests that crypto adoption in the country is more resilient that its counterparts in the region. This might be due to the favorable regulatory environment in the UK.
In April 2022, the government unveiled a plan to make the UK a global crypto-asset technology hub. This was headed by then Chancellor of the Exchequer (head of treasury) Rishi Sunak, a pro-crypto official. He is now the current Prime Minister.
The plan aims to:
- introducing a ‘financial market infrastructure sandbox’ to enable firms to experiment and innovate,
- establishing a crypto-asset Engagement Group to work more closely with the industry,
- exploring ways of enhancing the competitiveness of the UK tax system to encourage further development of the crypto-asset market,
- and working with the Royal Mint on a Non-Fungible Token (NFT) this summer as an emblem of the forward-looking approach the UK is determined to take
There is also a potential plan to use blockchain to store trading documents. There is a recent bill recognizing cryptocurrencies as regulated financial instruments, which will give a clearer framework for digital assets.
Instead of simply protecting traditional finance and blocking emerging digital assets, the government took a proactive approach.
The Future of Crypto Britannica
Klarna, a Swedish Fintech company, conducted a money management survey on 13 high-income countries, including the UK. It found out that money is no longer king. An increasingly digitized society is moving away from physical payment methods. The survey also indicated that 19% of UK residents invest in financial instruments. And for those who invest, 17% are willing to put their money in cryptocurrencies.
The percentage of consumers who are willing to put crypto in their portfolio is small compared to traditional instruments like stocks and bonds, but with the government’s goal of making the country a crypto technology hub, it is just a matter of time before the number of crypto investors increases.
A lot of people are realizing that crypto is a viable financial instrument. It can be used for money transfers, payments, and more. It does all of these, but faster and cheaper compared to other instruments.
With a new pro-crypto prime minister, digital asset adoption will probably get more support in the country. This will be seen as bullish on the world stage. A “traditional” country embracing crypto, which is still considered new and risky, is a game changer.
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