The Central, Northern, and Western Europe (CNWE) region has solidified its position as the world’s second-largest cryptocurrency economy after North America. According to Chainalysis data covering July 2023 to June 2024, CNWE recorded a staggering $987.25 billion in on-chain transaction volume—accounting for 21.7% of global crypto activity. This region not only demonstrates strong adoption but also shows sustained growth, with an average year-over-year increase of 44% across most countries.
At the forefront of this expansion is the United Kingdom (UK), which remains the largest crypto economy within CNWE. It received $217 billion in cryptocurrency inflows during the period and ranks 12th on Chainalysis’ Global Crypto Adoption Index.
Rising Dominance of Bitcoin and Stablecoins
When examining transactions below $1 million—encompassing both professional ($10K–$1M) and retail (<$10K) transfers—Bitcoin (BTC) stands out with nearly 75% growth, the highest among all asset types in CNWE. Across all transaction sizes, BTC accounted for $212.3 billion, roughly one-fifth of total on-chain value received in the region.
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While BTC growth in smaller transfers lags behind North America, CNWE surpasses it in adoption of other assets—particularly stablecoins. For sub-$1 million transactions, stablecoin volume grew 2.5 times faster in CNWE than in North America. Stablecoins now represent nearly half (42.3%) of all crypto inflows to the region, totaling $422.3 billion.
Monthly inflows of stablecoins in this category consistently ranged between $10 billion and $15 billion over the past year. Even amid declining volumes in May and June 2024, their market share increased—indicating resilient demand post-bull market. Over the last two years, stablecoins have dominated transaction activity across asset classes, averaging 52.36% of all sub-$1 million purchases from July 2022 to June 2024.
Regulatory Shifts Fueling Stablecoin Demand
A key insight from order book data reveals that euro (EUR)-denominated purchases of stablecoins accounted for 24% of fiat-linked trades, compared to just 6% for BTC. Conversely, U.S. dollar (USD) usage was higher in BTC purchases than in stablecoin buys.
This divergence underscores a regional preference: CNWE users are increasingly optimizing for stablecoin acquisition when converting fiat, suggesting a focus on utility, stability, and cross-border efficiency rather than speculative investment.
To better understand this trend, Chainalysis engaged with BVNK, a global platform offering multi-asset stablecoin payment solutions.
Chris Harmse, Co-Founder and Chief Commercial Officer at BVNK, affirmed that their internal data aligns closely with Chainalysis’ findings:
“Our fiat infrastructure exists to serve our stablecoin platform. They coexist—we’re bridging the gap between traditional finance and digital assets.”
BVNK’s commercial clients use stablecoins for real-world use cases, and notably, 90% of consumer payments processed through their system are conducted in stablecoins.
Business Services Boom in the UK and Beyond
CNWE hosts the world’s second-largest market for crypto-based business services, trailing only Central and South Asia Oceania (CSAO). This sector grew by 58.4% year-over-year, driven primarily by the UK.
Stablecoins dominate these services, consistently capturing 60–80% of quarterly transaction volume. As a key provider serving businesses across the UK and Europe, BVNK supports B2B and B2B2C applications such as:
- Settlement: Fintechs and payment providers use stablecoins to settle invoices faster and cheaper than traditional banking systems.
- Deposits: Consumers leverage stablecoins to deposit funds on trading platforms, recharge gaming or sports betting accounts, or make online purchases via crypto-enabled gateways.
- Payouts: Money service businesses (MSBs) pay contractors and employees—many based in Latin America—using stablecoins to bypass currency devaluation and limited USD access.
For example, citizens in high-inflation economies like Argentina (which saw inflation exceed 143% in late 2024) are increasingly adopting stablecoins to preserve purchasing power.
Harmse explained:
“In emerging markets, businesses now see stablecoins as an alternative. Just as Argentinian consumers struggle to access USD, companies face barriers with legacy payment systems. By using stablecoins, they unlock global trade flows and ensure timely invoice settlements.”
Average B2B transactions via BVNK range from $100,000 to $250,000—typically large-scale cross-border payments, mostly directed toward Latin America. Consumer-facing payments fall between $100 and $1,000.
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New use cases continue to emerge. Harmse highlighted micro-payments to freelancers in the gig economy—especially cross-border ones where traditional fees are prohibitive. He also noted growing adoption among non-profits and NGOs using stablecoins to deliver aid quickly during crises.
Another player in the space is Payhound, a Malta-based crypto payment processor serving the online gaming industry with settlement and high-volume transaction capabilities.
Elton Dimech, Managing Director at Payhound, believes innovation drives adoption:
“Online businesses want to offer as many payment options as possible—especially more innovative ones.”
Real-World Asset Tokenization Gains Momentum
Despite being in early stages, real-world asset (RWA) tokenization is gaining traction across CNWE. Philipp Bohrn, VP of Public and Regulatory Affairs at Austria’s Bitpanda exchange, observes rising interest in tokenizing real estate, intellectual property, collectibles like art and wine, and even vehicles.
Sylvain Prigent, Chief Product Officer at SG-FORGE—the regulated blockchain arm of Societe Generale—points to their landmark issuance of a digital green bond directly on Ethereum’s public ledger. This move enhanced transparency and traceability of ESG data.
Prigent emphasized that security tokens and RWAs could democratize access to traditionally exclusive financial instruments:
“We’ve done extensive development to ensure this infrastructure is ready for seamless integration with traditional finance.”
DeFi Activity Ranks Fourth Globally
CNWE ranked fourth globally in DeFi activity over the past year, receiving $270.5 billion in crypto value—on par with global averages but outpacing North America, East Asia, and MENA regions in growth rate.
Decentralized exchanges (DEXs) were the primary driver of growth, while other DeFi categories like lending, NFTs, and bridges saw declines after short-term spikes.
Notably:
- NFTs and bridges surged briefly in Q1 2024 before reverting to baseline levels.
- Lending peaked in Q4 2023 but has steadily declined since.
- CNWE’s DeFi growth rate was double that of previous years—twice the global average increase of 1.5x.
Regulatory Outlook: MiCA and Beyond
The EU’s Markets in Crypto-Assets (MiCA) regulation came into effect for stablecoins in summer 2024—a milestone expected to shape the future of crypto adoption in CNWE. However, rules for Crypto Asset Service Providers (CASP) won’t take full effect until December 2024.
Experts weigh in:
Philipp Bohrn (Bitpanda):
“Regulatory uncertainty and cross-border compliance complexity remain major hurdles. There’s also a knowledge gap—many don’t understand how tokenization works or its risks and benefits. But closing this gap with clear frameworks can unlock true innovation.”
Elton Dimech (Payhound):
“In Malta, we operate under strict rules while competing with lightly regulated firms elsewhere. MiCA will level the playing field—if enforced uniformly across the EU.”
Sophie Bowler (Zodia Custody):
“Clear regulation is essential for mainstream adoption. It empowers firms to innovate confidently and encourages traditional institutions to enter the space.”
Some firms may temporarily shift operations to the UK if they cannot meet MiCA requirements. However, Bowler expects UK regulations to align closely with MiCA, with new FCA crypto legislation expected in early 2025.
Chainalysis will continue monitoring regulatory developments across Europe to assess their long-term impact on crypto adoption.
Frequently Asked Questions
Q: Why are stablecoins so popular in CNWE?
A: Stablecoins offer price stability, fast settlement, and low-cost cross-border transactions—making them ideal for business payments, remittances, and protecting against inflation.
Q: How does MiCA affect crypto businesses in Europe?
A: MiCA introduces comprehensive rules for stablecoin issuers and service providers, enhancing consumer protection and market integrity. Full enforcement begins December 2024.
Q: Is Bitcoin losing ground to stablecoins in Europe?
A: Not necessarily—BTC remains dominant for investment purposes. But for everyday transactions and business use cases, stablecoins are increasingly preferred due to their utility.
Q: What role do businesses play in driving crypto adoption?
A: Companies are integrating crypto into payment systems, payroll, settlements, and supply chain finance—accelerating practical use beyond speculation.
Q: Will RWA tokenization become mainstream?
A: Early signs are promising. With regulatory clarity and institutional participation growing, tokenized real-world assets could reshape capital markets within five years.
Q: How does CNWE compare to North America in DeFi growth?
A: CNWE’s DeFi growth outpaced North America’s over the past year, particularly in DEX usage and short-term NFT/beta trends—though overall volumes remain lower.
Keywords: cryptocurrency Europe, stablecoin adoption, business crypto services, MiCA regulation, real-world asset tokenization, DeFi growth, Bitcoin Europe