Crypto adoption blooming in Germany, while UK is falling ‘behind,’ says CoinShares researcher
A CoinShares researcher says cryptocurrency adoption is advancing in Germany through family offices, wealth managers and younger investors, while the United Kingdom is lagging behind largely because of slower regulatory progress. Germany leads in MiCA registrations and is seeing major banks move into custody services, whereas the UK’s retail-facing market remains nascent despite recent regulatory steps by the Financial Conduct Authority (FCA).
Why It Matters
The differing pace of institutional and retail crypto adoption between two major European markets could influence where service providers and capital concentrate as the EU and UK finalize regulatory frameworks. Regulatory timing and approvals are shaping how banks and asset managers enter the market.
Key Facts
- Source: Cointelegraph, quoting CoinShares researcher Luke Nolan
- Germany licensed crypto firms: 89 crypto-asset service providers
- Share of ESMA MiCA register: 25.5% accounted for by German firms
- MiCA authorizations in June: Germany led with 57 authorized crypto companies
- Deutsche Bank: Awaiting regulatory approval to offer crypto custody in Europe; license expected in October
A CoinShares researcher said Germany is making notable progress in cryptocurrency adoption, driven in part by family offices, wealth managers and younger investors using inherited wealth to access digital assets. Luke Nolan described uptake among these groups as showing "very good progress," noting that younger generations are a meaningful vector for adoption.
Germany currently has 89 licensed crypto-asset service providers, representing 25.5% of firms on the European Securities and Markets Authority's MiCA register. The country was also the bloc leader in MiCA authorizations in June, with 57 authorized crypto companies.
Large German banks are beginning to enter the space: Deutsche Bank has said it is waiting for regulatory approval to launch crypto custody services for institutional clients in Europe and expects a license in October. Earlier in April 2024, the Landesbank Baden-Württemberg started offering crypto custody after partnering with Bitpanda for an institutional custody platform.
By contrast, Nolan characterized the UK market as "still very much behind," citing regulatory delays. The FCA lifted its ban on crypto exchange-traded products less than a year ago (the ban had been in place since January 2021), and the regulator has only recently issued final guidance on when crypto activity will require authorization under the incoming regime. The FCA will open licensing applications on Sept. 30, with transitional arrangements applications due by Feb. 28, 2027, ahead of the new regime taking effect on Oct. 25, 2027. The regulator has also issued enforcement actions, including a cease-and-desist letter to three London locations suspected of facilitating illegal peer-to-peer crypto trading.
UK Parliament approved rules bringing digital assets under the FCA's remit in February and finalized a package of rules and guidance in June, but industry observers cited by Cointelegraph view the UK’s retail-facing crypto market as nascent compared with Germany's current traction among institutional advisers and private wealth channels.
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