A report from the Bank of Spain claims that the number of transactions in Europe has increased.
Cryptocurrencies are a magnet for money. A Bank of Spain report published this Tuesday estimates the volume of transactions with this type of asset in 2021 in Spain alone at around 60,000 million euros, which is equivalent to about 1,275 euros per inhabitant.
The fixation to invest in them is not out of place with respect to the surrounding countries: Spain accounts for around 10% of the business in the eurozone, a weight proportional to that of its GDP. The digital currency is still the little sister when compared to the Stock Exchange, which in 2021 moved a volume six times greater, but the trends are opposite: while electronic currencies gain ground, the sale of shares in Spain fell by almost 12% last year.
Report on Cryptocurrencies in Spain
The diagnosis is that in Europe only in the United Kingdom, France, Germany and the Netherlands, there were more transactions in 2021 than in Spain, which is fifth on the list. The Netherlands and Portugal stand out, where the volume of operations was higher than what would correspond to them due to the size of their economies.
The results cannot be considered completely reliable; therefore, the Bank of Spain has used other sources of information. The prevailing thesis is that the Spanish are especially attracted to cryptocurrencies.
The Finder Cryptocurrency Adoption Index, which conducts a regular survey in 27 countries, estimates that 12% of adults have invested in them in Spain. Most are men (13%, compared to 10% of women). The group of young people between 18 and 24 years old, more used to moving through the digital universe, was the most active in purchases, a reality that raises concern due to the lack of financial culture in certain cases, as well as their exposure to specific scams.
One Percent Illicit Activities
The Bank of Spain explains that the percentage of operations that are aimed at illicit activities is low, only 1% in Spain between July 2020 and June 2021, but warns that it may be due to the way they are measured. Chainalysis only identifies those where there has been a police investigation.
Another phenomenon highlighted by the regulator is that the boom in cryptocurrencies is not only caused by small savers, but by the emergence of institutional investors. “A greater relative importance of larger transactions (of more than 10 million dollars) is observed, which suggests that they would have gained relative importance in operations with these currencies,” the text explains. There are no signs, on the other hand, that banks are more exposed, although the difficulties in measuring it mean that there is some caution in this regard.
Regulatory Vacuum
The entity recognizes the virtues of the technology behind cryptocurrencies: it highlights that they can improve the efficiency and resilience of the financial system by reducing transaction costs and that they allow greater interoperability in payments and more competition.
The Bank of Spain points out that “activities on crypto assets in Spain are not currently regulated, except for certain advertising requirements set by the CNMV”. And it explains that right now the institution lacks the power to regulate and supervise cryptocurrency providers, although the evolution of the market is monitored, “due to its responsibility for financial stability.” Given its international expansion, it urgently calls for the establishment of homogeneous rules so that there are no different regulations that force disputes to be resolved through arbitration.
By Audy Castaneda
