The Financial Conduct Authority (FCA) published its second research note today. The FCA research note concludes: A rising number of UK consumers is holding digital assets.
In the UK, the FCA is the conduct regulator for 59,000 financial service firms and markets. As such, it supervises 49,000 firms. The organization commits to fostering debates on financial regulation and setting standards. In addition, it publishes research results to underpin decision-making. As part of the UK Cryptoassets Taskforce, the FCA works with the Bank of England and the British government.
More and more UK consumers holding digital assets
The FCA estimates that 3.86% of the general population own some form of digital assets. At the same time, 75% of consumers hold assets with a value lower than 1,000 pounds. Consumers seem to have accepted high volatility and lacking regulatory protection. They want to partake in the “gamble” of price fluctuations. For many, digital assets are a form of speculation with potentially high returns.
While the number of asset holders continues to rise, UK consumers mostly use non-UK based exchanges. Moreover, most consumers hold their digital assets with the same exchanges used to acquire them. When buying digital assets, UK consumers like to use their own equity. The preference for own capital seems to be linked to the level of knowledge.
A statistically significant increase in digital asset holders (past and present) is highlighted in the research’s findings. Up to 5.35% of consumers are holding digital assets. This number went up by 2.35 percentage points. The number of consumers holding assets was only 3% in 2019. In absolute numbers this means: There were 1.5 million consumers, which hold or held token in 2019. In 2020, the number grew to 2.6 million people.
Rising consumer awareness in the UK
When it comes to consumer awareness: In 2019, 58% of survey participants indicated to have never heard of cryptocurrencies. In 2020, the number changed significantly. Only 27% of consumers state to have never heard about cryptocurrencies. The rise in consumer awareness is probably a result of greater media coverage and adverts.
Main findings of the FCA report
The FCA concludes that consumer awareness is rising. Among others, the level of awareness and knowledge has increased due to media coverage and adverts. Furthermore, the number of token holders is growing. Digital assets are seen by UK consumers as a form of speculation. Whereas, speculation in a sense similar to gambling. Also, UK consumers have a clear preference for non-UK based exchanges as well as using their own equity.
One can expect a rising demand for digital assets as the number of UK consumers holding them rises.
Source: FCA research note: Cryptoasset consumer research 2020
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