Why is crypto still not adopted in Europe?

Why is crypto still not adopted in Europe?

The amount of individuals and businesses using and owning cryptocurrency in Europe is enormous, so why are so many European countries still scared of it?

The European Central Bank (ECB) recently issued a research on the whole digital asset market’s financial stability concerns, showing that 10% of European households may possess cryptocurrency.

Around 6% of people who owns cryptocurrency said they have assets worth more than $32,000. According to a recent Federal Reserve Bureau report, the higher a household’s income, the more probable it is to own cryptocurrency.

Lower-income families, on the other hand, are more likely to own cryptocurrency than middle-income ones.

According to the authors, “stellar growth, volatility, and financial innovation” are all solid reasons to evaluate the digital asset market’s dangers to financial stability.

The ECB formerly considered the dangers of cryptocurrencies to financial stability to be low, but recent developments such as decentralized finance have changed their mind.

It mentions stablecoins, which many people are concerned about, and the recent TerraUSD fall as instances of potential concerns. Stablecoins are one of the top concerns for regulators, and all of the world’s major economies are working on solutions.

Those concerns may be justified if cryptocurrency grows increasingly integrated into the global economy. The digital asset market was formerly seen to be a solid hedge against the hazards of other markets, but that view appears to be fading. During the current downturn, the digital asset market, like others, crashed.

Some governments have gone all-in and proclaimed bitcoin to be legal money. This has angered international organizations such as the International Monetary Fund (IMF), which claims its adoption might cause problems.

Other governments are attempting to find a balance by allowing crypto and blockchain technology to exist while not declaring it legal tender.

As this kind of digital asset becomes more mainstream, the scrutiny will only grow, prompting increased engagement from organizations like the European Central Bank.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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