Europe Cryptocurrency Market Update: Growth, Regulation, & Innovation in 2020

Europe Cryptocurrency Market Update: Growth, Regulation, & Innovation in 2020

Cryptocurrency markets are on the rise worldwide, but few have borne fruit quite like Europe. The entire region took significant steps to regulate and cultivate industry growth in 2018–2019, as major players like France and Germany develop independent guidelines for crypto investors. Meanwhile, Malta’s has fully embraced both crypto and it’s regulation, bringing the European cryptocurrency market into full bloom.

Despite these gains, the story of European crypto innovation is far from complete. Current events influence the market every day, especially as Brexit transforms the region’s political and economic relationships. Here are just a few recent developments impacting the European crypto community as 2020 marches forward.

Brexit will leave its mark UK crypto community

London represents one of the world’s leading cryptocurrency cities, thanks in no small part to a wide range of fintech and crypto-related startups. The British capital also hosts major blockchain events like the Advancing Bitcoin Developer Conference, the Blockchain Expo World Series, and various seminars that explore the potential of digital assets. What’s more, the market for crypto continues to grow as firms seek out developers and software engineers to fill crucial openings.

The problem is that Brexit has raised many legitimate concerns about the UK’s status as a financial hub for the region. It’s not entirely clear how crypto markets will respond to severed ties with Europe. One fascinating possibility is that following Brexit, bitcoin will experience a boom. The UK’s exit could have a positive impact on the sentiment of crypto investors — bitcoin was already popular in UK crypto communities, and bore no association to financial institutions. Even considering bitcoin’s volatility, its current upward trend could make it a hedge against a Brexit-driven economic downturn.

In the short term, these factors mean we might see bitcoin prices spike over the coming months. In the long-term, crypto stability relative to the British pound might transform London into a crypto investment haven. Of course, this outcome is far from assured, as it depends partly on whether regulators will even embrace bitcoin in the coming months.

For more information about Brexit’s impact on UK bitcoin markets, read our feature article on the topic.

UK Cryptocurrency Regulation in 2020–3 Considerations for Traders

Of course, the UK does face significant hurdles before it can become a crypto haven — especially if it’s competing with the rest of Europe. The region has proved to be remarkably open to well-regulated blockchain technologies, while the Bank of England and Financial Conduct Authority (FCA) has been content to leave crypto as an unregulated market. Outside of Brexit, however, there are signs that this dynamic is finally changing:

1. UK cryptocurrency regulation is becoming more explicit

The FCA is responsible for regulating all financial practices within the UK. Until now, it’s been relatively lenient on digital assets, refusing to regulate them even as it describes BTC, ETH, and LTC as questionable investments. Crypto’s sustained growth has now forced the FCA to take an active role in crypto guidance. For example, the FCA will deliver a decision related to a possible UK ban on certain crypto derivatives sometime this quarter.

2. UK tax authorities are paying more attention to crypto

Taxation guidance is a priority for most crypto regulators in the UK — which is understandable, given the industry’s unregulated growth in recent years. As of writing, British tax authorities seem willing to acknowledge digital assets as taxable earnings. Previous guidelines have treated crypto-related income in much the same way as gambling winnings. Each token and asset type will be assessed on an individual basis to evaluate potential tax liability.

3. Crypto investigations in the UK are on the rise

The UK isn’t pushing ahead with crypto regulations for its own sake. These efforts will provide legislative guidance, but they also let law enforcement take a more active role in combating money laundering and fraud. Crypto-related investigations surged by 74% from 2018–2019, while the FCA has reported that investors lost over $34 million to scams.

For more details on UK crypto regulation guidelines, take a look “UK Cryptocurrency Regulation in 2020–3 Considerations for Traders.”

Malta is the gold standard for global crypto regulations

Crypto markets are expanding across Europe, but no location is as well-developed as Malta. This island nation has become a global center of cryptocurrency development and the dominant player of European fintech.

Malta was the first nation to enact legal regulations for crypto back in 2018, despite being one of the smallest sovereign states in the world. In response, crypto investors and exchanges alike rushed to Malta, including 85,000 attendees for the DELTA and Malta Blockchain Summits. Elected governments and regulatory bodies supported this influx by publishing clear guidelines and operational procedures for how digital currencies will operate across the country.

Europe’s new “blockchain island” has reaped the benefits of crypto regulation. As it entered 2020, Malta found itself in the top position on the EU Commission’s forecast for economic growth. Cryptocurrency companies and projects gain a level of regulatory certainty that isn’t yet available in the United States or Asia. What’s more, developers can collaborate in facilities like the Chiliz Blockchain Campus to create blockchain innovations of the future.

Malta is proof that cryptocurrency regulations can uplift the industry, and it offers an adoption blueprint that world leaders can follow themselves.

For more information on Malta’s blockchain success story, check out “Malta & Cryptocurrency: Regulation & Innovation on the Blockchain Island.”

Discover Europe’s cryptocurrency opportunities with OKCoin

Europe’s cryptocurrency opportunities haven’t just expanded an industry — they’ve created an influx of traders who are knowledgeable, highly engaged, and drive innovation in terms of technology and regulations. Thanks to this community, we now see more cities like Prague that rank among the best cities for spending crypto. Futuristic imaginings like using bitcoin to buy coffee and movie tickets — or even rent an apartment — have officially become a reality.

And this is just the start of Europe’s crypto expansion. That’s why OKCoin is pleased to be a part of this community and take every action we can so European users can trade with confidence:

  • In 2019, we launched a BTC EUR trading pair that acts as a fiat on-ramp for the euro.
  • We listed the Stasis EURS — the first euro-backed stablecoin — on our exchange.
  • We enabled spot trading with the EURS for USD, the euro, and bitcoin itself.

Europe’s crypto leadership will continue to guide industry growth, but it remains just one part of an international community. Blockchain operates on a global scale, which means similar developments are occurring in regions like North America and Asia. At OKCoin, we are proud to be a part of that crypto-friendly future and intend to continue sharing digital assets to new users worldwide.

Looking to join the conversation? We’d love to hear your thoughts on the European Cryptocurrency market! Leave a comment below.

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