The United Kingdom’s Financial Conduct Authority estimates that roughly 2.6 million U.K. consumers have bought cryptocurrency “at some point.”
On June 30, the FCA published the results of its latest research into how consumers interact with crypto markets in the U.K. It found that 1.9 million people — 3.86% of the general adult population (18+) — currently own cryptocurrency.
This presents what the FCA considers to be a “statistically significant increase,” up from 3% in the last FCA consumer research report in 2019.
The increase brings the total number of U.K. consumers who have ever held cryptocurrencies at any point up from 1.5 million to its current estimated figure of 2.6 million.
Aside from the marked uptick in crypto owners, awareness of the industry appears to be on the rise — 73% of adults have heard of cryptocurrencies, as compared with 42% last year.
Further breakdown of the watchdog’s findings
The FCA’s research indicates that 75% of the 1.9 million currently holding crypto hold under £1,000 ($1,229) worth. 83% of crypto owners buy their assets via non-U.K. based exchanges.
In general, holders’ level of technical knowledge and understanding of the potential risks associated with lack of protections and asset volatility is high, according to the FCA.
One exception is that 11% of current and former crypto holders mistakenly believe their crypto assets are covered by consumer protections — amounting to roughly 300,000 people.
The FCA believes that this places these consumers at risk of financial harm. Yet it also found, in parallel, that the most popular reason for U.K. consumers to buy crypto was “as a gamble that could make or lose money,” with full awareness of the volatility in crypto markets.
Another key finding in the research is the apparent prevalence of crypto-related ads and their influence on consumer decisions.
45% of current and former holders said they had seen a crypto-related ad, of which 35% (400,000 people) said it made them more likely to purchase crypto. Overall, 16% of current and former crypto-owners said they had been influenced by advertising.
Summary of FCA research findings, Dec. 2019. Source: FCA
The U.K. crypto climate
As reported earlier this week, the FCA has just released a detailed statement urging all local crypto business operators to register with the authority by today. Its latest registration requirements come with a series of specific compliance measures, primarily in the areas of Anti-Money Laundering and Counter-Terrorism Financing.
In its announcement today, the FCA noted it is working with the government and Bank of England as part of the U.K. Cryptoassets Taskforce to tackle crypto-related consumer risks while encouraging innovation.
The U.K.’s government budget in March 2020 indicated the government plans to consult on measures to potentially bring certain crypto assets into the scope of financial promotions regulation.