The cryptocurrencies move in Spain around 60,000 million euros. The ‘Spring Report 2022’ published this Tuesday by the Bank of Spain informs for the first time of the volume of assets that move the cryptocurrencies in Spain. The figure implies 4.8% of GDP and 2.7% of all financial assets that moved last year in Spain. The data handled by the financial regulator shows the weight of cryptocurrencies in the economy and among the population: “12% of adults in Spain own crypto assets currently, 13% in the case of men and 10% in that of women, while ownership would be higher for the youngest, with the age group between 18 and 24 having the highest percentage for adoption,” the report explains.
Spain was during 2021 the fifth economy by volume of transactions of europe crypto assets, this region being the main recipient on a global scale, according to the Bank of Spain, which clearly justifies the need for more precise regulation. “The regulation of crypto assets poses challenges as novel as the risks involved and international coordination,” the report explains.
According to the same data, during the past year, the transaction volume in Europe was about 845 million euros in crypto assets (4.9% of GDP, 0.9% of total financial assets), which represents 25% of the global total, ahead of North America, with 18%, which it is also its main counterparty in crypto asset transactions. Within Europe, Spain ranked fifth in transaction volume in 2021, with nearly 60 million, behind the United Kingdom, France, Germany and the Netherlands, and ahead of Switzerland and Italy.
The analysis by geographical area can be broken down by type of crypto asset, investor and service associated with the transaction, and even approximate the incidence of illicit activities. The information on the volume of transactions and the type of service associated with them can be derived from existing information, while the type of investor can be approximated by the amount of the transactions, and the incidence of illicit activities through collaboration with government authorities. With data from the current income campaign, the Tax Down firm calculates that the number of notices sent by the Tax Agency to crypto investors has reached 233,000, that is, 1,474% more than the previous year. But it is estimated that only a requirement for transactions with cryptocurrencies has been sent to 5.3% of investors who have this type of asset.
Institutional investors
During the last year there would have been an increase in the trading of crypto assets in Europe, in which institutional investors would have gained prominence, but without evidence of a material degree of involvement in this segment of banking entities. According to data from Chainalysis, the volume of transactions with crypto assets during the first half of 2021 (latest data available) accounted for more than ten times the amount traded during the same period in 2020. This increase in trading volume would respond, in principle, to the greater number of transactions, but also to the revaluation of the main unbacked cryptoactives (such as bitcoin), as well as to the greater available supply of ‘stablecoins’ (, linked to currencies of legal tender, as is the case of tether) in the period considered.
Considering the type of transaction, over time a greater relative importance of the larger transactions (of more than 10 million US dollars), which suggests that institutional investors have gained relative importance in the operations with these currencies. There is still no reliable data on banking investment in cryptocurrencies.
Europe
In terms of trading volume of crypto assets, Spain has a proportional weight to its GDP in the context of the euro area. The weight of the transactions carried out in Spain, in relation to those carried out in the euro area, was around 10% of the total between July 2020 and June 2021, similar to its relative economic size in the region. In general, activity is highest in most economically important countriesalthough in some of them the volume of operations is somewhat higher than would be expected in relation to GDP (for example, the Netherlands and Portugal).
types of cryptocurrencies
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Transactions of unbacked crypto assets (such as bitcoin) account for most of the operations, and trading activity without intermediaries is predominant. Network coin transactions ethereum (which includes ether, in addition to the rest of the tokens of said network) would be particularly important (39% of the total in Spain, 42% in the other countries). Regarding the type of protocol, there is a greater relative weight of decentralized services (64% of the total in Spain, 53% in the other economies), compared to centralized alternatives or those that require intermediaries in the negotiation, such as the chambers of change. However, brokerage services are growing rapidly in some countries, which could be due to various factors, such as fewer formal requirements when executing transactions, as well as the incorporation of liquidity requirements for participation in centralized platforms.
illicit activities
There is a certain proportion of operations with these currencies that are aimed at illicit activities, and only an estimate of the lower bound of the weight they represent over the total is available. In the case of Spain, the percentage of these operations would represent approximately 1% of the total between July 2020 and June 2021. This percentage is low, but could constitute a lower bound, since Chainalysis only identifies as such those in which There has been a police investigation process. Fraud (57.6% of the total) and fund theft (31.8%) would concentrate most of the illicit operations identified in this region.