The United Kingdom has seen a significant increase in cryptocurrency ownership among adults, with 12% of the population now owning digital assets, up from 10% in previous years. This data comes from the latest research conducted by the Financial Conduct Authority (FCA) and published on November 26th. Alongside the rise in ownership, awareness of cryptocurrencies has also grown, with 93% of adults now familiar with digital assets.
The FCA’s study revealed that the average value of crypto holdings per person has increased from £1,595 to £1,842. Interestingly, family and friends have emerged as the most common source of information for individuals who have not yet purchased cryptocurrencies. Additionally, only one in ten buyers admitted to doing no research before investing in digital assets.
Despite the growing interest in cryptocurrencies, the FCA cautions that these assets remain largely unregulated in the UK and are considered high-risk investments. Investors are warned that they could potentially lose all their money without any regulatory safeguards in place.
The FCA has begun outlining its approach to regulating digital assets, with a focus on fostering transparency and engagement in policy development. The regulatory body aims to develop a comprehensive regulatory framework for cryptocurrencies in the UK, aligning with global trends in crypto regulation.
The research conducted by the FCA also highlighted shifts in consumer behavior regarding crypto investments. More individuals are now considering cryptocurrencies as part of a diversified investment portfolio, with influence from friends and family playing a significant role in the decision-making process. Additionally, the use of long-term savings to purchase crypto has increased, as has the use of credit cards or overdrafts for investing in digital assets.
Recent events such as the crypto market crash in 2022, the cost-of-living crisis, and criminal charges against CEOs of major exchanges have impacted consumer demand for cryptocurrencies. However, despite these challenges, 26% of non-crypto users indicated that they would be more likely to invest if the market and activities were regulated.
The FCA’s roadmap for regulating digital assets in the UK includes key milestones to be achieved by 2026. These milestones involve implementing financial promotion rules, regulating stablecoin issuance and custody, establishing prudential standards, and creating comprehensive rules for trading platforms, intermediaries, lending, and staking.
Matthew Long, director of payments and digital assets at the FCA, emphasized the need for clear regulation to support a safe, competitive, and sustainable crypto sector in the UK. The FCA aims to develop a regulatory framework that promotes innovation while ensuring market integrity and consumer trust in the crypto industry.
In conclusion, the FCA’s research highlights the growing interest in cryptocurrencies among UK adults and the need for clear regulatory guidance to protect investors and promote a healthy crypto market in the country. With ongoing developments in the regulatory framework, the UK aims to establish itself as a leader in crypto regulation while fostering innovation and consumer protection in the digital asset space.