Cryptocurrency Regulations World Map - EU

While roughly 17% of Europeans use cryptocurrencies, a figure similar to that of other affluent countries, they fall below the global average of around 23%. Adoption rates were 18% in the United States and 20% in Australia.

35% of Europeans expressed their concerns on security, and 34% said they didn't know how to acquire or store cryptocurrency. The number of Europeans who stated it was because they didn't trust it was 33%, which was greater than in other regions of the world.

While 2021 was a watershed moment for cryptocurrency acceptance in Europe, 2022 may be slower. Only 7% of individuals in Europe who have not yet purchased cryptocurrency intend to do so, compared to 21% overall.

- Legality of Cryptocurrency

Although cryptocurrency law differs by member state, it is generally regarded legal throughout the European Union, but Euro-backed member states to introduce their own cryptocurrency may be limited.

The European Commission initiated a public consultation campaign in January 2020, with the goal of determining where and how crypto assets fit into the existing EU cryptocurrency regulatory framework. In September 2020, the Commission issued a new proposal called as the Markets in Crypto-Assets Regulation (MiCA). The plan outlines proposed cryptocurrency regulatory measures, including a new licensing system for crypto-asset issuers, industry behavior norms, and additional consumer safeguards.

MEPs evaluated and updated the European Commission's proposal, and in March 2022, they voted to begin discussions with EU nations in the Council on the ultimate design of these laws.

- Cryptocurrency Exchanges in EU

Cryptocurrencies and crypto assets are categorized as qualified financial instruments (QFI) in the European Union. Banks, credit institutions, and investment organizations are not prohibited from owning, getting exposure to, or providing services in crypto assets or cryptocurrencies under EU legislation.

Exchanges that trade in QFis are regulated at the regional level, and businesses can use their current QFi licenses to supply cryptocurrency-related products and services. Firms must, however, adhere to a slew of EU cryptocurrency regulations and laws, including AML/CTF, CRD/CRR, EMD2, MiFID II, PSD2, compensation, margin, deposit, and penalty requirements.

Exchanges must register with their respective authorities in some EU member states, such as Germany's Financial Supervisory Authority (BaFin), France's Autorité des Marchés Financiers (AMF), and Italy's Ministry of Finance. These authorities' authorizations and licenses can then "passport" exchanges, allowing them to operate under a single system across the EU.

Following in the footsteps of 5AMLD, 6AMLD has ramifications for cryptocurrency exchanges. The regulation makes legal entities as well as people liable for money laundering offenses, which means that executives of crypto asset, currency, wallet, and exchange organizations will have to monitor their internal AML measures considerably more closely in the future.

Coinbase is one of the most well-known cryptocurrency trading platform in Europe. eToro, the multi-asset platform, is also one of the popular crypto trading exchanges across the continent. Kraken, the U.S-based crypto exchange is a trusted one with a strong foothold in the European market too. Then there is Gemini, founded in 2015 with the goal of being a fully compliant cryptocurrency exchange with banking-like regulations. Many see Gemini as a platform poised for future regulatory scrutiny as the cryptosphere becomes increasingly regulated.

- Crypto Trading Volumes in the European Market

The overall market value of crypto-assets in the EU has surged eightfold in the previous two years to about 1.5 trillion euros as of February 2022, however it is still roughly 1 trillion euros below its high in November 2021. According to a research, crypto-assets are beginning to achieve public acceptance, with 6% of Slovakians and 8% of Dutch people reporting ownership.

- Future Crypto Regulations Landscape

The European Union is currently considering new cryptocurrency legislation. Concerns about the hazards of private digital currencies were raised in a draft EU paper, which also stated that the European Central Bank is considering establishing its own digital money. The EBA is also pushing for the creation of a single AML/CFT rule book that all member nations would be required to follow.