Cryptocurrency adoption is advancing in Germany, particularly among younger investors, while the United Kingdom is gradually falling behind, largely as a result of lagging regulation, according to CoinShares crypto researcher Luke Nolan.

Nolan told Cointelegraph on the Chain Reaction show on Thursday that German adoption is showing “very good progress,” driven by “family offices, wealth managers, individual advisors” and younger generations looking to invest inherited wealth in digital assets.

In contrast, the UK is “still very much behind,” Nolan said, adding that the country's Financial Conduct Authority (FCA) only lifted its ban on crypto exchange-traded products less than a year ago, leaving its digital asset market “nascent.” The regulator previously barred retail participants from such products in January 2021.

Germany's position is also reflected in Europe-wide registration data. The country has 89 licensed crypto-asset service providers, accounting for 25.5% of firms on the European Securities and Markets Authority's (ESMA) Markets in Crypto Assets (MiCA) register, which was updated on Wednesday. The EU's biggest economy also led the bloc by MiCA authorizations in June, with 57 authorized crypto companies. MiCA, the EU's unified licensing framework for crypto-asset service providers, allows a firm authorized in one member state to offer its services across the bloc.

Source: Cointelegraph

Leading German banks are venturing into crypto

The adoption trend has not gone unnoticed by Germany's largest banks. Deutsche Bank, the country's biggest lender, revealed on Wednesday that it is awaiting regulatory approval to launch crypto custody solutions for institutional clients in Europe, with a license expected in October.

In April 2024, Germany's largest federal bank, the Landesbank Baden-Württemberg, began offering crypto custody solutions after partnering with Austria-based Bitpanda for its institutional custody platform. Custody services involve a provider safeguarding clients' digital assets on their behalf.

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Meanwhile in the UK, the FCA on Wednesday issued final guidance outlining when crypto activities may require authorization under the country's incoming regulatory regime. The regulator will open licensing applications on Sept. 30, with a Feb. 28, 2027 deadline for firms seeking transitional arrangements ahead of the new regime taking effect on Oct. 25, 2027. The timeline means UK firms will not operate under a dedicated crypto regime until late 2027, even as their German counterparts already hold EU-wide MiCA authorizations.

On Thursday, the FCA announced that it sent a cease-and-desist letter to three London locations suspected of facilitating illegal peer-to-peer crypto trading. The move underscores that the FCA can act against suspected illegal crypto activity under its existing rules ahead of the new regime taking effect in 2027.

The UK Parliament approved regulations bringing digital assets within the FCA's regulatory remit in February and finalized a package of rules and guidance in June.

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Source: Cointelegraph