Cryptocurrency adoption is advancing rapidly in Germany, particularly among younger investors and wealth management professionals, while the United Kingdom is gradually losing ground due to regulatory delays, according to analysis from CoinShares crypto researcher Luke Nolan.
German adoption is progressing through family offices, wealth managers, and individual advisors, with younger generations increasingly investing inherited wealth in digital assets. In contrast, the UK remains significantly behind, with the Financial Conduct Authority only lifting its ban on crypto exchange-traded products less than a year ago, leaving the country's digital asset market in early stages.
Germany's regulatory leadership
Germany has 89 licensed crypto-asset service providers, representing 25.5% of all companies in the European Securities and Markets Authority's Markets in Crypto Assets register. The country held the top position across the EU for MiCA authorizations in June, with 57 authorized crypto companies.
Germany's largest banks are capitalizing on the regulatory clarity. Deutsche Bank announced it was awaiting regulatory approval to launch crypto custody solutions for institutional clients in Europe, with a license expected in October. Earlier, in April 2024, Germany's largest federal bank, Landesbank Baden-Württemberg, began offering crypto custody solutions after partnering with Austria-based Bitpanda for its institutional custody platform.
UK regulatory progress
The UK's regulatory framework is moving forward but remains nascent. The FCA issued final guidance on Wednesday outlining when crypto activities require authorization under the incoming regulatory regime. Licensing applications will open on September 30, with a deadline of February 28, 2027 for firms seeking transitional arrangements before the new regime takes effect on October 25, 2027.
The FCA also announced enforcement action, sending cease-and-desist letters to three London locations suspected of facilitating illegal peer-to-peer crypto trading. The UK Parliament approved digital asset regulations in February, with the FCA finalizing rules and guidance in June.
