By Janani Janarthanan

Medill Reports

VIENNA — The Viennese cafe Das Delicious in the 11th district was packed on a Saturday evening. Near the billing counter was a big table, with more than 10 patrons — most of them wearing glasses, all of them men clad in T-shirts and jeans. But they had more in common.

One of them approached the counter, scanned a QR code from the owner’s phone, paid a bill in cryptocurrency and returned to the table, much like any other digital transaction. Members at that table were cryptocurrency enthusiasts, coming from a Bitcoin meetup in the 1st district. 

“Sometimes there are two, three weeks when there are no Bitcoin payments, but then suddenly there are days when five to seven people pay by Bitcoin,” the cafe’s owner, Paul Music, said.

Music’s experience is an example of the unpredictability of crypto usage and its ownership in Vienna. Since it entered Austria in 2013, it has suffered from negative media coverage, a lack of trust, price volatility and cyber threats. According to a 2022 Austrian national bank survey, a mere 3% of the population own crypto, though legal experts and even the regulator say they feel this would be an undercount now.

Aside from ownership figures, the regulatory landscape is also changing. Fully implemented since Dec. 30, the Markets in Crypto-Assets Regulation, often shortened to MiCA regulation or MiCAR, is an European framework that sets rules for issuance, and regulations for service providers, prompting a larger question of whether Vienna’s crypto community will survive in a more scrutinized environment.

If adoption remains low, Europe runs the risk of being surpassed in adoption and financial technology by the United States and Asian countries in the near future, according to Oliver Völkel, a partner at the corporate law firm Cerha Hempel. He said tightening regulation could also stoke further exploration of Decentralized Finance (DeFi) which is currently outside the regulatory ambit. DeFi expands on the premise of existing cryptocurrency, providing various decentralized, peer-to-peer financial services on blockchain.

 

The demographic

A poll by Statistics Austria in 2024 found only 9.8% of the country’s population of almost 9 million have an appetite for financial trading in the form of shares, bonds, funds, cryptocurrencies and other financial assets. This is slightly higher in Vienna at 11.5%.

“At least millennials and maybe zoomers — those who straddle the timeline between Gen Z and Millennials— are aware of different digital assets and use the ecosystem in some way,” according to Yaël Ossowski, a fellow at the Bitcoin Policy Institute and the deputy director at Consumer Choice Center. He credited some of it to cryptocurrency service providers that market digital assets favorably. 

The Austrian National Bank, or Oesterreichische Nationalbank (OeNB), noted in a 2024 bulletin that a “consistent but small proportion of individuals hold modest quantities of cryptocurrency assets,” averaging at 6,000 euro. It also stated these asset holders tend to be younger than the average citizen and predominantly male.

 

Ownership uncertainty

 

An OeNB survey on household cryptocurrency asset ownership in 2018 estimated 1.6% of Austrians owned crypto. In 2022, this rose to 3%. 

Bitpanda, a private service provider, estimates ownership at 18% in Austria, fueled by a rising interest from a younger crowd.

Ossowski estimates closer to 8% of the Austrian population might be investing in crypto and similar digital assets. “Nowadays, they are integrated into other banking products. Many of the fintech banks like N26 and Revolut integrate digital assets so that you can buy and sell within these platforms,” he said. 

 

How crypto crossed borders 

Austria’s first exposure dates to when Bitcoin —  the largest cryptocurrency by market value — became popular because of a policy decision in Germany.

“In 2012, 2013 when Bitcoin became a thing and the first entrepreneurs began selling it, the German regulator BaFin issued a legal opinion early on stating that it viewed cryptocurrencies like Bitcoin, as a unit of account,” Völkel said. 

Units of account are a type of financial instrument. This meant that commercial trading of cryptocurrency would require authorization and licensing. This was not the case in Austria. This early regulatory stance was a positive signal from the Austrian regulator, and nascent businesses set shop in Austria, according to Völkel.

“The Austrian regulator also got exposure to cryptocurrency business models early on, and many of the now-famous players like Bitpanda became headquartered in Austria, despite having German roots,” Völkel added.

 

Pandemic spurs activity

The next push for crypto interest emerged after the pandemic, for a new wave of enthusiasts like Music. What was initially just a means to make quick fiat gains —  making small trades through buying and selling in the short term — turned into a larger passion. In 2022, Music said he stumbled across a YouTube video on small businesses leveraging Bitcoin and decided to accept crypto as a payment option at his restaurant. 

Music said he still averages between 30 to 60 payments in crypto a month, with a small average payment size of 15 to 20 euro. But Bitcoin payments were not an instant hit. In the first year, no customers used the option. However, that didn’t deter Music. “Just start (accepting) and wait, a Bitcoiner will come to you,” he said.

Businesses like Music’s also boast Bitcoin ATMs on their premises, presenting the notion of its popularity, if not a guarantee. Search results show there are currently just 36 Bitcoin ATMs in Vienna, compared with 984 in Chicago, reducing it to a budding interest and not widespread acceptance in the Austrian capital.

Google Trends reports the highest point of crypto interest was seen in May 2021, with a dramatic drop by July 2021. Though the interest recovered in December 2024, it remains much lower than the highs of 2021. 

 

A new wave of adopters

A sophisticated audience for cryptocurrency fueled by curiosity also exists. Joao Ochôa, a lawyer and research associate at the Institute for Austrian and International Tax Law, said he began investing in cryptocurrencies because of his interest in blockchain. Blockchains are decentralized ledgers that keep a record of transactions, but its uses can expand beyond cryptocurrency.  He uses neobanks, like Revolut, and such investments account for 10% of his total portfolio. 

“In the beginning, it was curiosity because I wanted to understand it,” Ochôa said.

“I was reading a lot about it, and I needed to know how it worked and get the feeling of it,” Ochôa said.

He added has more faith in cryptocurrencies like Ethereum and Bitcoin, but he still considers it a bit of a gamble because he is not convinced of crypto in the long-term. 

“There is a feeling that there is no underlying asset … this seems to be the (larger) European sentiment,” he said. 

 

Regulator’s take

With MiCAR in the picture, service providers seem to be acquiring licensing and using it to differentiate themselves from competitors.

Ten companies have applied for a MiCAR license in Austria, according to the Austrian regulator. So far, Bitpanda has received one. The total applications may eventually reach the 20s, according to Stefan Tomanek, the team leader for Financial Innovation at the Austrian Financial Market Authority (FMA).  

The regulation also aims to shed light on the ownership.

“It’s hard to give an indication how this (share of investors) may develop or where it might stand because the data we have here (at FMA) is limited,” Tomanek said. “But this will also change with MiCAR. We will get a broad overview of what is happening and how the consumer/user base is developing.”

Banks, according to FMA’s Matyas Imre, manager of the regulator’s cross-divisional MiCAR-hub, are still hesitant due to the optics surrounding the asset-class like high volatility and central bank opinions.  

“So far, there is no significant tendency to invest from banks’ side. Institutional investors are holding back for more regulatory clearance, but on the other side, the regulatory risk mitigation measures are also not incentivizing them to invest,” Imre said. 

Imre added some of this also draws from European monetary conservatism. 

“As an Austrian, I would say Austrian investors are very risk-averse. They are more used to deposit investments and tend to avail classic investment products,” he said. 

 

A fluid asset 

MiCAR is in line with the larger European regulation, according to Richard Stern, director of the WU Global Tax Policy Center in Vienna. The reason, he added, is because “We (Europe) have no borders, as you know, no borders physically, but also financially.” 

Among its consequences, the new regulation may offer confidence to people like Ochôa. 

“If you are an enthusiast, it’s very easy for you to think that the red flags are perfectly explainable. But crypto assets are super opaque, so with a third-party looking in, it helps make a more informed decision,” Ochôa added.

The ability to constantly monitor the movement of the digital asset is a chief consideration for the regulator. 

“The reason why these (crypto) assets are such an issue is that number one, there’s no mechanism to track them,” Stern said.

Service providers can be listed as long as they can prove they can track all the movements on the respective asset blockchain and have access to the sender’s and recipient’s financial identity, according to FMA’s Tomanek. 

“Crypto can fork or morph from one thing to another,” Stern said. 

“For example, when you have a stock or bond, you know its value is going to change because of the markets, but it’ll always be a stock or bond for its life, whereas a crypto asset is not necessarily the same thing from when it started, to five transactions later,” Stern added.  

 

A minority

 

 

 

Grassroots activism for the digital asset exists parallel to regulation. 50 people crammed into a small room for a day-long informational session in the 1st district, all engrossed by the history of money and banking, the origin of cryptocurrency and using digital wallets.  

“The community of (crypto) users is small,” said Harald Schilly, one of the co-founders of Bitcoin Austria and organizer of the event. “And that number has not really doubled in the last few years.” 

This fuels the meetups hosted by Bitcoin Austria, which he describes as a small, but persistent, grassroots effort. 

Some like Ossowski said they feel cryptocurrency use will increase over time as the older and existing systems will show cracks. He feels dysfunctions in the fiat systems during high fiscal deficits, geopolitical tensions and war may change how people view currency. 

“I do believe (crypto) enthusiasm will survive the stricter regulations. … It’s now less about experimentation and more about giving people new use cases,” Ossowski said, adding this could include crypto debit cards, easy platform investing and acceptance of crypto payments.

For now, traders like Ochôa, enthusiasts like Schilly and restaurateurs like Music populate the membership ranks of Austria’s nascent crypto community. 

However, the prevalence of the digital asset as a commonly availed investment option or even as a payment medium, is still far from reality.

“There are many Bitcoiners in Germany and in the Czech Republic, and because Austria’s geographically close to both of those countries, I think we are also a Bitcoin country,” Music said, “But we just don’t know it yet.”