December 9, 2018 Article

What is the Secret Behind Europe's ICO Success?

The number of cryptocurrencies being issued each month keeps growing. However, countries where these digital assets are being issued can choose to either regulate them, leave the industry unregulated, or ban them altogether.

In countries like China, the government has opted for a complete ban of cryptocurrency trading activities while in the US, the industry is largely unregulated. But things seem to be different in Europe. In a country like France, the government is striking middle ground and is considering regulating the industry. In so doing, France is on its way to rank among the first major economies to regulate initial coin offerings (ICOs).


ICO Success

This approach to ICOs has seen Europe rise rapidly to become a global hub for cryptocurrencies with high amounts of funding streaming into cryptocurrency projects. This year alone, cumulative ICO financing stands at approximately $4.1 billion in Europe. This is almost double the $2.3 billion that has so far streamed into the Asian ICO market and significantly higher than the $2.6 billion that has so far gotten into the US ICO market.

But what factors are driving Europe's ICO success? The most obvious is the regulatory environment that is friendly to cryptocurrency projects. Just recently, Canada's Coinsquare crypto exchanged opened operations in the region due to the largely positive regulatory environment that governments have created.

To a large extent, European countries have spearheaded efforts to enact policies that provide data protection and payment services. Such regulations are beneficial to players within the cryptocurrency space in addition to boosting investor confidence in the market.

According to Qupon's founder, Joseph Oreste, the rising investment in ICOs being witnessed in Europe emanates from the fact that the regulatory environment does not burden investors like it does in other countries, such as the US.

Some European countries have already begun positioning themselves as leaders in the cryptocurrency race. Bruno Le Maire, the French Minister of the Economy and Finance, has made the country's intention to become a hub for ICOs very clear. The UK already set up a task force to review and advise the government on the opportunities that cryptocurrencies present while Switzerland has set its eyes on leading the cryptocurrency space.


Rising Talent

But it is not just regulation attracting investors to the European ICO market. There is the issue of talent that, in a way, is driving innovation in the cryptocurrency space. Europe is home to major cryptocurrency project cities that include London, Zug and Berlin. These cities have captured the attention of fintech investors, attracting startups as well as notable crypto projects.

As a block, the European Union, which comprises of 50 unified yet diverse countries, allows developers to form multinational teams that are diverse in the development of crypto projects. Often, the most success projects are those that have a broad contributor community that have a global outlook. 


 Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.