Plunging pound could be lifting UK crypto growth

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UK ranks 17th globally for crypto adoption, up four places from 2021

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A sharp drop in the value of the pound could draw investors to cryptocurrencies like bitcoin as new research finds that the UK is the only major European economy to have experienced a surge in crypto adoption since the start of the year.

London’s thriving tech scene and world-class financial institutions are also among the possible reasons for the UK’s dominance in crypto, according to research by blockchain business Chainalysis.

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Kim Grauer, Director of Research at Chainalysis, told The Standard: “I don’t think people think, ‘The pound is down so I’ll turn to crypto’ but as the pound falls other options may become more attractive – ‘lower my portfolio’. The returns are visible, let me think of other options.'”

Sterling has fallen 19% against the dollar since January.

The UK ranks 17th globally for crypto adoption, up four places from 2021. It is the only high-income country other than the US to feature in the top 20. Most of the other countries ranked higher on the list are emerging markets with more volatile currencies and capital controls. Vietnam topped the list, followed by the Philippines and Ukraine.

“One of the biggest reasons… many countries around the world push people into crypto is not the passion for the underlying cryptocurrency but the capital controls that make it truly free to transact,” Grauer said.

“Those people are happy to use crypto as an alternative, and that is clearly a different reason to use crypto than in India, where people are using it for NFTs.”

Only 50% of crypto activity in the UK is related to decentralized finance or DeFi, which are financial services operated using blockchain technology.

Credit: www.standard.co.uk /

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