The decentralized continent: What Web3 in Europe really looks like
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The decentralized continent: What Web3 in Europe really looks like
In Europe, Web3 is a quieter revolution.
Navigating Web3 tides with focused insightsAuthor: Ada, TechFlow
Feng, who has been building a Web3 startup in Europe for five years, recently returned to Beijing. Over the years, he's shuttled between Germany and France, organized numerous industry meetups, and connected with a group of fellow Web3 entrepreneurs also based in Europe.
When discussing Europe’s Web3 landscape, Feng’s take is straightforward: it's a haven for idealists. While pure idealism hasn’t given Europe an absolute edge in the global crypto map, it hasn't shaken their belief in Web3 idealism either.
From Switzerland’s “Crypto Valley” in Zug to Paris’s Station F incubator; from Berlin Blockchain Week to Amsterdam’s DeFi innovation communities—this ancient continent continues to craft its own distinct crypto narrative, different from those of the United States and Asia.
When we shift our attention away from the crypto frenzies seen in the U.S., Japan, South Korea, and the Middle East, and turn instead toward this relatively quiet world, one question arises: What unique role does Europe play in the global crypto ecosystem?
The Decentralized Continent
If asked to describe Europe’s crypto industry in one sentence, Feng responds without hesitation: "decentralized."
This decentralization means, first, that there's no cult of personality around a single central figure.
In the U.S., many people enter crypto inspired by celebrity founders or influencers. In Europe, however, more individuals are drawn into Web3 by personal convictions about privacy, open protocols, and free markets. Their motivations tend to be simpler—many founders aren’t primarily driven by profit, but by the belief that “this thing is worth doing.”
Secondly, geographically, Europe lacks a single dominant hub. Each country and city brings its own character, collectively forming a fragmented yet layered Web3 map.
First, Germany.
Germany has no mega-metropolis; its industries are widely distributed. Many world-class companies operate quietly in small towns. Berlin, its largest city, has only around 3.5 million residents—comparable to a mid-sized Chinese prefectural city.
The long winters and introverted social culture make it something of an engineer’s paradise. Germans prefer staying indoors to focus on technical work, and boast strong R&D capabilities. Attend a conference in Berlin and you’ll quickly notice: technical attendees always outnumber business professionals.
"Few Germans choose to go into business roles—most are focused on research or development," says Mike, who runs a wallet project in Germany.
France, by contrast, has a completely different vibe.
A significant portion of French people in crypto come from traditional sectors like fast-moving consumer goods, fashion, and luxury brands. During NFT’s peak years, top marketing, branding, and business talents from companies like L’Oréal and Louis Vuitton were drawn into the space. Naturally skilled at networking and market expansion, they often take on business-oriented roles—forging partnerships, launching projects, managing communities, and driving market outreach.
The third country is Switzerland, whose keyword is “neutrality.”
Switzerland offers clear and favorable compliance frameworks, along with relatively lenient tax policies toward crypto, making it ideal for non-profits or research institutions. The Ethereum Foundation, Solana Foundation, and other Web3 foundations have chosen to base themselves in Switzerland, attracted by its stable and predictable institutional environment.
Then there’s Lisbon, Portugal.
Lisbon’s prominence in the Web3 scene owes much to its people.
Portugal offers digital nomad and golden visas, combined with pleasant weather and low living costs, attracting many Americans who’ve already made money in Web3 to relocate.
Many of them no longer run day-to-day operations of active projects. Having earned enough, they settle in Lisbon for a relaxed retirement, while occasionally participating in investments, gatherings, and community events.
Germany’s technical culture, France’s business acumen, Switzerland’s regulatory advantages, and Lisbon’s digital nomads together form the mosaic of Europe’s Web3 industry.
Crypto Quiet Luxury
When people think of Web3, their first associations are often the U.S., Hong Kong, or Singapore. But according to Feng, Europeans’ sensitivity and demand for decentralization and privacy are no lower than these regions—in fact, possibly even stronger.
Half of the top ten projects by TVL originate from Europe. This reflects both the strength of engineering culture and Europeans’ willingness to support novel ideas and emerging sectors—even when immediate returns aren’t apparent.
"Previously, a project was judged by whether it could get listed on Binance. Now things are changing—we look at whether a project can generate positive cash flow, and whether people actually use the product. In Europe, once a project finds its target audience, competition isn’t as fierce as in the U.S. or Asia. People treat it as a legitimate business rather than a ‘grab-and-run’ scheme."
"Also," Feng adds, "while Europeans may not excel in math, they’re willing to spend time deeply researching things, which leads to many small but beautiful teams that earn substantial incomes."
In terms of overall penetration, Web3 remains niche in Europe. Industry adoption stands at around 6%, meaning only 6 out of every 100 people use cryptocurrency—significantly lower than in the U.S. and Asia. Users are mostly aged between 25 and 40.
Unlike high-frequency, high-leverage trading habits seen in South Korea and parts of Asia, most Europeans don’t bet their entire wealth on crypto. For them, cryptocurrency is more like one option within asset allocation, rather than an all-or-nothing gamble.
This ties back to Europe’s historical experiences and wealth structure. Many Europeans have lived through various speculative eras and aren’t desperate for overnight riches.
Among the wealthy, fortunes are often built over generations, making them more receptive to narratives like “holding a bitcoin for their descendants,” rather than believing they can leap social classes by betting everything on a 100x or 1000x coin.
Another objective constraint exists: in Europe, most compliant exchanges don’t offer high leverage, and derivative or leveraged products are very limited. This institutional design inherently reduces the possibility of all-in bets.
That said, this doesn’t mean Europeans lack trading desire. Instead, during market cycles, some interesting behavioral patterns emerge: when the market is down, they work locally to save money; when it recovers, they move to lower-cost countries to trade full-time.
"Last year I met an Italian guy based in Switzerland. He works at a Swiss restaurant for four months each year, then spends the remaining eight months flying to Thailand and the Philippines, staying four months in each, trading crypto full-time," says Feng.
Stablecoin Boom
Like elsewhere in the world, in Europe stablecoins are widely seen as one of the most promising directions, with nearly every European bank exploring related initiatives. However, the underlying drivers differ from those in Asia or emerging markets.
The primary reason lies in payment infrastructure.
The EU still lacks a truly unified, independent payment and settlement system, continuing to rely heavily on American-led networks like Visa and Mastercard. For many Europeans, this means their economic lifelines remain tied to foreign-built systems. As such, both policymakers and banks are eager to explore a European-owned settlement solution—making stablecoins and their underlying on-chain clearing networks a frequently discussed option.
The second driver stems from geopolitical tensions and industrial relocation.
After the outbreak of the Russia-Ukraine war, surging energy prices and rising manufacturing costs placed heavy pressure on Europe’s traditional industries, prompting many factories to relocate to the Asia-Pacific region. As globalization deepens, cross-border trade settlements have become more frequent and complex. Efficient settlement across different currencies and regulatory regimes has become a pressing challenge.
Compared to traditional international wire transfers, on-chain settlement using stablecoins offers clear advantages in both speed and cost.
The third factor comes from long-term shifts in consumer behavior.
Post-pandemic, large numbers of Europeans have grown accustomed to online shopping, where sellers often come from all over the world. To keep such a cross-border, cross-timezone, multi-currency system running smoothly, lightweight, low-fee, and high-speed payment methods naturally gain favor—giving stablecoins added practical legitimacy.
However, real-world progress remains difficult.
Europe’s banking system is highly traditional, with many institutions having existed for over a century. Whether in governance or risk appetite, they’re ill-equipped to rapidly adopt new technologies. Before Trump took office, the entire European financial system held a generally hostile or indifferent stance toward crypto.
The real shift began when they realized American capital and major institutions had already poured massive resources into crypto.
The problem is, many traditional finance professionals have never personally participated in crypto—they know little about wallets, on-chain interactions, or DeFi protocols. When they begin learning, they often turn first to consulting firms for guidance—but many of these consultants are just as traditional.
"I see a huge market potential, but I think it might take quite a while for these traditional Europeans to fully understand it—unless some external force pushes things forward," says Vanessa, a Web3 practitioner with many years of experience in Europe.
According to Vanessa, earlier European crypto trends like metaverse and NFTs eventually faded. Similarly, Europeans once loved BTCFi, spending considerable time and money supporting BTCFi projects. But later, they realized these projects couldn’t generate solid cash flow—staking Bitcoin for a few percentage points in annual yield could lead to serious risks, and simply holding Bitcoin turned out to be safer. As a result, most BTCFi projects lost momentum.
When asked where Europe’s real Web3 opportunities lie, Feng gives a simple answer: "I think Europe has two big advantages: nearly 600 million people, and most of them live in developed countries."
In developing nations, average monthly income might be just a few hundred dollars, whereas European users typically earn 5 to 8 times more. When building products, targeting higher-income customers increases the likelihood they’ll pay for services—and thus boosts potential returns.
How Is Tax Collected?
On April 20, 2023, the European Parliament passed the EU’s Markets in Crypto-Assets Regulation (MiCA) with 517 votes in favor. One of the most comprehensive digital asset regulatory frameworks to date, MiCA covers all 27 EU member states, as well as Norway, Iceland, and Liechtenstein in the European Economic Area (EEA).
MiCA Article 98, combined with the EU’s eighth Directive on Administrative Cooperation in Taxation (DAC8), along with national-level variations, form a relatively complex but increasingly clear taxation framework. A common principle is: crypto transactions themselves are exempt from VAT.
Under this overarching principle, individual countries maintain their own tax characteristics. Germany and France stand out as representative cases in crypto compliance, and are thus the most frequently discussed in the industry.
Germany was the first country in the world to officially recognize the legality of Bitcoin and other crypto transactions, and ranks second after the U.S. in number of Bitcoin and Ethereum nodes.
In Germany, cryptocurrencies are classified as “private property,” and taxation mainly involves income tax, VAT, and taxes on specific activities.
If crypto assets are held for over a year before selling, capital gains are exempt from income tax; if sold within a year, gains are subject to income tax up to a maximum rate of 45%.
Using crypto to pay for goods or services triggers taxable events if the coin’s value has increased since acquisition. However, if the holding period exceeds one year, this gain is also tax-exempt.
For activities like staking, lending, and airdrops, German tax authorities require reporting and payment of income tax. Mining is classified as a commercial activity and subject to trade tax.
In France, crypto is treated as movable property, and tax burdens are relatively high—with no tax exemption for long-term holdings.
France follows the same VAT rules as Germany, but profits from crypto trading are subject to a flat 30% capital gains tax. If crypto trading is deemed a professional activity, it falls under commercial income tax, which may carry higher rates. However, tax liability is only triggered when crypto is sold for fiat currency, and gains under €305 are tax-free.
Crypto mining enterprises in France must pay taxes under the BNC (non-commercial profits) regime at a 45% rate. Non-commercial miners with annual revenue below €70,000 may qualify for certain BNC tax reductions, but those classified as commercial operators do not.
Beyond taxation, other supportive policies are gradually being implemented. As Vanessa puts it, this is the best of times: with compliance advancing, more people are thinking long-term, aiming to build sustainable businesses with steady income, rather than launching token-centric projects.
To many observers, Europe’s Web3 scene may seem perpetually quiet—lacking stories of 100x tokens, and short on emotionally charged price swings.
But from another perspective, on this land where idealism meets institutionalism, a different kind of crypto enterprise and participant is emerging. They care more about whether products are actually used, whether projects can survive long-term, and whether sustainable business models can be found within strict compliance frameworks.
We may well believe that on this idealistic soil, the future will give rise to more distinctive crypto-native innovations.
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