In the race to catch up with the United States in terms of crypto innovation, Europe has recently presented a tantalizingly attractive opportunity for crypto firms in the U.S. With many banking institutions in the U.S increasingly facing pressure to step away from the crypto industry, the EU has become a much sought-after alternative due to their more defined regulatory framework and user-friendly fiat payment systems.
As the Silvergate controversy unfolded and the associated banking problems in the U.S began to increase, cryptos across Europe have been gaining momentum as firms look for viable alternatives. The push for Europeans to capitalize on the situation has been further reinforced by the recent Markets in Crypto Assets Act (MiCA) that offers greater clarity and regulation when it comes to crypto-related activities. The lack of similar regulatory action in the U.S and increasing ambiguity has led many to believe that Europe will become the next hotbed of crypto innovation, representing a major shift in the industry’s operating environment.
The usage of stablecoins in particular proved to be increasingly attractive in light of banking issues, with stablecoins commanding a significant majority of the total volume on decentralized exchanges and the percentage of market share for all volume on centralized exchanges hitting a new all-time high. This suggests that investors are continuing to prefer stablecoins over traditional fiat currency in order to remain disconnected from banking institutions, and further pushing their usage as a medium of exchange.
As the potential door continues to close on access to American banks and their associated fiat payment networks, the Euro has become increasingly attractive. The Bitcoin-Euro pair had its highest level of market share against the U.S. Dollar ever recently, reaching 21% of BTC volumes, and regulators in the EU have been quite active in their efforts to support the crypto industry in Europe. The ultimate success of these efforts will be determined in the coming months but attitudes seem to be changing, with some banks in the EU potentially even opening their doors to crypto deposits.
The developments across Europe suggest that Europe could soon become a major player in the crypto world. It remains to be seen if the next batch of European banks will take a risk and raise their hands to welcome crypto firms, but obvious opportunity is on the horizon for Europe which could provide a cost-effective, reliable banking option for crypto firms. Factored with the added regulatory clarity, the time could be now for Europe to capture some of the crypto industry’s limelight and realize its ambition to be a major player in the crypto world.