Digital Europe: how the money of the future is taking over the Old World

The European Union is a gargantuan market. Its GDP is closing in on $19 trillion, which amounts to 22% of all economic activity around the globe. Due to its free market, the trading block is a true superpower.

However, free market or not, Europe’s approach to digital currencies is complicated by the political nature of the European project. One of the key issues that determine the rate of adoption is legislation. On the one hand, restrictive legislation can hinder users’ capabilities. On the other, lack of a regulatory framework creates an aura of insecurity that keeps people away, especially larger use cases with more to lose.

The EU doesn’t have just one single legislative body

Legislative capabilities in the European Union are split between the national parliaments of every member nation and the European Parliament itself. This has made the Union weary of making large overarching decisions about digital currencies, since there is no consensus among member states. This regulatory disparity and the European Central Bank’s apparent reluctance to issue a digital currency that would in effect compete with the Euro may just be blockchain’s major hurdles in the European Union.

But this is the decade of adoption, and it is going to happen anyway.

Members states have taken matters into their own hands

Since the EU doesn’t seem ready to legislate on a European level, plenty of member states have done it themselves. Malta has quietly made itself into one of the world’s first blockchain havens, with a full regulatory framework. Germany, on the other hand, has refused to acknowledge digital currencies as such, but has drafted laws that treat them as a financial instrument. This will be a boon for legitimate exchanges, even if it won’t help people use them as money on a day-to-day basis.

One of the most heartening developments on the digital currencies front in Europe has been the creation of the so-called “Mediterranean Seven”. Led by Malta, countries such as Portugal, Spain, France, Italy, Cyprus and Greece have signed a document called the Southern European Countries Ministerial Declaration on Distributed Ledger Technologies (DTL). Quite a mouthful. What it is is a 10-point plan for the development of blockchain technology in Southern Europe.

Portugal is walking the walk

Portugal has implemented some serious measures to make the country attractive to investors and high-net worth individuals. It has a golden visa program and a non-habitual residency regime, aside from sunny beaches and a lovely mediterranean climate. So it came as no surprise when Portugal adopted some pretty enticing measures to advance digital currency adoption and encourage investors to make Portugal their home.

Portugal has taken some strong fiscal measures to make digital currencies appetising. Digital currency payments for retail or services are exempt from VAT. Not only that, but proceeds from the sale of digital currencies are also tax free (sale of financial products are usually taxed at 28%). Mining rewards as well.

But it’s not just the tax advantages. Portugal has also just launched a national digitalization plan, which will provide infrastructure and incentive for Portugal’s businesses and individuals to innovate and compete. The plan is quite comprehensive, and its scope is broad. For digital currencies, however, there’s one provision that stands out: Technological Free Zones (or ZLTs, Zonas Livres Tecnológicas, in Portuguese). These areas will allow companies that are working on new technologies, such as blockchain, to experiment, by providing special regulatory regimes or even direct assistance from regulatory entities.

We ourselves have our main offices in Braga, Portugal, and we are quite confident we couldn’t have made a better choice. We are being granted the legal and regulatory conditions to make our product great, which is something blockchain companies around the world need.

Creating such an advantageous environment for digital currencies to grow and develop could just make Portugal one of the true havens for blockchain and digital currencies to establish themselves. There is still a way to go in terms of public awareness and the creation of a proper regulatory framework, but the work is definitely underway.

Adoption is growing, regardless

It can be very difficult to parse how many active users of digital currencies are out there. There are dozens of digital wallets providers, all with their own numbers. There is no way to figure out how many wallets any singular person has, since most own several. Because of this, studies need to dig a little deeper, and study behavior and polls. We have learnt recently there are now over ten million Bitcoin users in Europe. Countries like Poland or Spain report usage rates of over 10%. This is quite remarkable news, especially as we’re seeing large use cases pop up everywhere. People are buying buildings with digital currencies. From a business standpoint, we can also definitely feel it. Fintechs are getting massive investments.

As far as retail goes, numbers are even harder to come by. Even in powerful economies, like the UK, no one seems to be keeping track, let alone the whole of Europe. What we do know is that large cities are leading the way to adoption. Places like Prague, Ljubljana or Amsterdam are normalising the use of digital currencies in everyday life. Ljubljana, capital of Slovenia, has taken it a step further and has opened the world’s first digital currencies-powered shopping mall, and it is massive.

By looking at the wider panorama and then at cities individually, it is undeniable that Europe’s capitals are leading the way to mainstream adoption. Adjusted for population, Ljubljana has over 10 times as many businesses accepting digital currencies as San Francisco, and Saint Petersburg has over 11 times as many as New York.

The future is bright

While there still may be a way to go for full adoption, every sign is positive. Adoption is growing, the use cases are growing with it. Regulatory frameworks are slowly but surely starting to acknowledge digital currencies and understand their potential.

At Utrust, we are walking the walk.

We are waiving our fees for new businesses who start accepting digital currencies. For three months, you pay 0%. That is how committed we are to making this happen.

Now is the time for your business to turbocharge adoption and get involved. The money of the future waits for no one, and this untapped market won’t remain that way for long. Head here, join us now, and make sure you don’t miss this opportunity.