Over a decade ago, cryptocurrency started as a niche technology with almost zero use cases. Now, the crypto market is one of the biggest financial markets, and it has been getting a lot of attention lately.
With the recent Bitcoin and Ethereum ETF approval in the US and a few countries using Bitcoin as legal tender, it will only take time before it makes its way into mainstream commerce and institutions.
The UK government approaches digital currencies with notable caution, but that did not stop the increasing number of UK businesses exploring how crypto technology can be integrated into their business processes. This article discusses how businesses in the UK are adopting cryptocurrency and the future of cryptocurrency in the island country.
The Growth of Cryptocurrency in the UK
Over the years, cryptocurrency has experienced a growing adoption rate in the UK, and multiple trading platforms like OANDA crypto have seen an increased number of users and trading activities. As of 2023, the UK’s FCA (Financial Conduct Authority) reported that 10% of adults living in the UK own some form of crypto asset. This report shows that there is an expanding consumer base interested in digital currencies.
Reports from institutions like the Bank of England also note increased discussion about the potential impact of cryptocurrencies on the country’s economy. This is particularly true in light of the possible introduction of a central bank digital currency (CBDC), often known as the “digital pound.”
Regardless of the impact cryptocurrency has had on the UK economy, the United Kingdom has still maintained a cautious approach, introducing several regulatory frameworks that protect consumers while promoting innovation. The Financial Conduct Authority is responsible for major crypto regulations and has enforced some policies for individuals and businesses. These policies ensure transparency and consumer protection and prevent financial crimes.
Integration of Cryptocurrency in UK Businesses
The rate of acceptance of cryptocurrency by UK businesses as a payment method keeps growing. We are still in the early stages of adoption, but some sectors like tech, luxury clothing, and fintech are leading the adoption process. CeX, Lush Cosmetics, Girl Meets Dress, and CheapAir are good examples of businesses that accept digital assets as a method of payment.
Businesses find the many advantages of using crypto, such as lower transaction fees and foreign customers, as an attractive payment alternative.
The technology industry has the most crypto integrations, with companies offering services like web hosting and software development. The travel and hospitality sectors are testing using cryptocurrency to book hotels and flights, potentially resulting in more rapid and affordable transactions for customers living abroad.
Acceptance of Blockchain in the UK
UK residents’ attitudes towards cryptocurrency as a form of payment for day-to-day transactions have improved over the years. A survey conducted by YouGov shows that over five years, the percentage of British people who have never bought cryptocurrency dropped from 77% to 65%. That survey also shows that the rate of people who have personally bought cryptocurrency increased from 3% to 12%, and the rate for people who do not know about digital assets dropped from 10% to 6%.
The price of bitcoin has fluctuated significantly over time, making it difficult for both consumers and businesses to maintain stable prices. Numerous cryptocurrency-accepting UK firms have implemented measures like quick currency conversion to ease these reservations. This guarantees that if a client pays with cryptocurrency, the company converts the amount paid into GBP right away, mitigating any potential financial risk associated with volatility.
Businesses that offer these services frequently collaborate with cryptocurrency payment processors to expedite procedures and guarantee adherence to regional laws.
The Future of Cryptocurrency in UK Transactions
The future of this financial market looks promising, and most financial experts expect more businesses to adopt blockchain technology over time. A noteworthy advancement that could occur soon is the possible implementation of a digital currency issued by central banks (CBDC), which is sometimes referred to as the “digital pound.” This digital money with government backing might give cryptocurrencies more credibility and facilitate their broader integration into daily transactions.
As the UK government continues to develop policies surrounding digital currencies, including the “Financial Services and Markets Act 2023,” businesses are likely to see more streamlined processes for adopting cryptocurrency. Additionally, as global adoption rates rise, UK businesses will benefit from improved technologies that make it easier to integrate crypto into their operations.
Is Cryptocurrency Staying in the UK?
Cryptocurrency is gradually gaining popularity in the UK as more people and companies study how it might be used for regular transactions. Even though there are still issues with volatility and regulation, the benefits of adopting digital currencies — like lower transaction costs, quicker payments, and access to international markets — make them too good to pass up. Businesses that use cryptocurrencies may find themselves ahead of others in the digital economy as the UK’s legal landscape changes and technological advancements intensify.