The UK is the biggest cryptocurrency economy in Central, Northern and Western Europe (CNWE), according to new analysis from blockchain data company Chainalysis.

The firm’s latest report, The 2024 Geography of Crypto, ranks the UK at number twelve in its global crypto adoption index, with $217 billion (£166.2 billion) received in crypto between July 2023 and June 2024.

That’s out of the $987.25 billion in value on-chain held by the CNWE region as a whole, accounting for over 21% of global transaction volume. After the UK, Germany ($125.3 billion), France ($101.2 billion) and Netherlands ($83.3 billion) all received the highest amounts of value on-chain.

According to Chainalysis, the CNWE region has the second largest crypto merchant service market – providing settlements, pay-ins, and payouts – after North America, being driven largely by the UK, which saw 58.4% year-on-year growth in these services.

The data reveals that stablecoins are the most popular asset, making up 60-80% of the market share each quarter, far surpassing Bitcoin. Across the region, stablecoins account for 24% of purchases traded with fiat currencies, while Bitcoin makes up just 6%. 

Interestingly, in contrast, Bitcoin purchases in US dollars were found to be far more common than stablecoin purchases, evidence of a growing divide in global approaches to adopting cryptocurrency.

For transfers under $1 million (£766,965), CNWE’s stablecoin volume grew at 2.5 times the rate of North America. In fact, stablecoins made up almost half (£323.8 billion) of all crypto inflows in the region. Over the past two years, data shows stablecoins have been the top choice for transactions in Europe, averaging 52.36% of all transactions between July 2022 and June 2024.

The report also delves into the future of crypto in light of the new Markets in Crypto-Assets (MiCA) regulations from the European Union. 

These regulations will cover various types of crypto-assets, including utility tokens, asset referenced tokens, and stablecoins, aiming to enhance transparency, and develop a framework for issuers and service providers in the crypto market. 

The legislation replaces individual EU member state’s national legislation for crypto-assets to create a consistent regulatory environment, with crypto providers now needing a licence to issue, trade, and safeguard crypto-assets.

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With MiCA’s rules for crypto-asset service providers set to take effect in December, compliance teams will be forced to implement more stringent controls, however the report notes that for firms that are unable or unwilling to meet MiCA’s requirements, there may be a short-term shift to the UK market.

“The UK has a significant opportunity to leverage the high levels of grassroots adoption to foster the sector’s growth,” said Jordan Wain, UK public policy lead at Chainalysis.

“Therefore, it’s important the Labour government capitalises on these drivers of success to ensure the UK positions itself as a global leader in the space and that, like their initiatives around other frontier technologies, blockchain technology and digital assets are recognised and supported as real foundations for national growth.”