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Global financial market concerns fuel rise in crypto adoption, Luno

Scott Thompson

On 9th May, FinCEN issued guidance on the ‘Application of FinCEN’s Regulations to Certain Business Models Involving Convertible Virtual Currencies’. While the guidance does not set forth any new regulatory requirements, it does combine all FinCEN regulations, rulings, and guidance around convertible virtual currencies (CVCs) since they were issued going back to 2011. In addition to the guidance, FinCEN also issued an advisory to highlight the risks associated with virtual currencies and how to identify and report suspicious activity. These come on the heels of its April statement which announced the first time ever penalty against a peer-to-peer cryptocurrency trader for failure to comply with the Bank Secrecy Act (BSA). Trader Eric Powers was fined $35,000 and is barred from providing

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For the first time in the UK 20% of people now own a cryptocurrency, according to research by Luno involving 1,000 people. In Europe, meanwhile, the level of ownership has increased by 5% (to 24.75%) from Q1 to Q2.

Marcus Swanepoel, CEO and Co-Founder of Luno, says:  “The volatility associated with the main cryptocurrencies, Bitcoin and Ethereum, had put off many investors and businesses. The recent stability in the coins, aligned with the increased general market uncertainty over issues such as the global trade wars and Brexit has made crypto a logical choice for firms and individuals looking to reduce their levels of exposure.”

For Brexit area investors seeking alternative investment methods, cryptocurrency is becoming an attractive option. Adoption significantly increased, according to data collected in March 2019, as Europeans moved some of their funds away from the Euro and Sterling into digital currencies.  These were used for managing payments (22.5%), shopping online (31.25%) or as part of an investment portfolio (58.25%). In the UK, 67% of buyers bought crypto as an investment, a significant increase on Luno’s Q1 survey of 55%.

There is increased confidence across Europe amongst potential crypto investors as France pushes the European Union to adopt a regulatory framework on cryptocurrencies similar to the guidance they have implemented at a national level. Yet Europe is still a long way behind other countries in adopting Bitcoin, Ethereum and other coins. For example in Africa, according to Luno’s research, just under 50% of Nigerians own a cryptocurrency, with a similar level being recorded in Indonesia.

The European Commission has recently launched a feasibility study on how to regulate the cryptocurrency markets, though no legislation is expected at least until late 2019. Whilst the majority of European cryptocurrency holders said they acquired the digital assets for investment purposes, Q2 saw a great increase in individuals in Europe using Bitcoin et al for online shopping with France dominating the adoption with a great increase from Q1 (26%) to 35% in Q2. Over half of the individuals in Italy (66%) 37% in the UK and 40% in France, said they would like to use cryptocurrencies to pay for things in stores and online.

Swanepoel concludes: “The global uncertainty currently impacting traditional financial markets shows the benefits of alternative investment systems which allow for secure, easy and efficient payments and investment options. It is the perfect time for everyone to look at how the world views and uses money, and to consider the real benefits of decentralised currencies.”

The post Global financial market concerns fuel rise in crypto adoption, Luno appeared first on Coin Rivet.