In its most comprehensive report on cryptocurrencies to date, the UK Financial Conduct Authority (FCA) outlined that they have increased in popularity and ownership since 2018, with up to 2.6 million people on the island holding digital assets.
The UK Watchdogs Advance On Crypto
According to the report from the FCA published earlier this week, the UK population and local authorities have become much more knowledgeable on digital assets since the first paper in 2018. Two years ago, the watchdog and the Bank of England were even contemplating “a potential ban on the sale to retail consumers of derivatives that reference certain types of cryptoassets.”
Following The Fifth Anti-Money Laundering Directive (5AMLD) introduced in January this year, the FCA became the anti-money laundering and counter-terrorist financing (AML/CTF) supervisor of UK-based cryptocurrency businesses. Since then, the paper asserted that illegal activities utilizing digital assets had dropped dramatically on the island.
Nevertheless, the FCA “continues to work with the Government and Bank of England, as part of a UK Cryptoassets Taskforce, to understand and address the potential harms from cryptoassets and encourage innovation in the interests of consumers.”
As proof of the UK’s advancements in digital currencies came the 2020 budget. The Government announced plans to consult on “bringing certain cryptocurrencies into the scope of the financial promotions regulation” and initiated negotiations for a broader regulatory approach. Those include “new aspects relating to so-called ‘stablecoins.’”
Crypto Ownership In The UK
The recent paper studied how the UK population is approaching its cryptocurrency investments. 79% of digital asset owners are males, while 69% are over the age of 35.
“We estimate that 3.86% of the general population currently holds cryptocurrencies. Half hold under 260 GBP worth.” – reads the paper.
Most participators displayed proper education, as 92% “correctly identified its definition.” 89% understood the lack of “regulatory protection,” and 15% answered that they are expecting to make fast profits.
On a more positive note than previous results, 92% said they hadn’t borrowed funds to purchase cryptocurrencies. This is quite different than the events during the parabolic price increase of 2017/2018 when lots of people were getting into debt to follow the FOMO (fear of missing out).
Another optimistic outcome from this year’s report indicated that only 27% “of the population has never heard of cryptocurrencies compared to 58% in the 2019 FCA Consumer Research.”
The report highlighted the significance of media coverage as it’s “playing an increasingly important role in introducing consumers to cryptocurrencies.” However, nearly half of the participants complained that there are plenty of misleading media outlets and fake news circling the space.