US Dominates Crypto Market as Stablecoin Activity Shifts Away

The United States Dominates the Global Cryptocurrency Market

According to a recent report by Chainalysis, the United States is the largest cryptocurrency market in the world, accounting for 24.4% of global transaction activity. The report, released on October 23, reveals that between July 2022 and June 2023, there was an estimated $1.2 trillion in value received on-chain in the U.S. This highlights the significant role that the U.S. plays in the cryptocurrency industry.

Institutional Activity Drives North America’s Crypto Transaction Volume

The report also highlights that institutional activity makes up 76.9% of North America’s crypto transaction volume. This indicates that large financial institutions are actively participating in the cryptocurrency market. The activity is split between centralized exchanges and decentralized finance (DeFi) platforms, showing the diverse range of options available to investors.

Stablecoin Usage Shifts Away from America

However, the report also notes that crypto activity is declining in the U.S. due to the ongoing “war on crypto” by financial regulators. Negative developments, such as the blowup of FTX and the collapse of major banks in March, have contributed to this decline. Additionally, stablecoin activity is shifting away from America, with a relative decline in North America’s stablecoin usage compared to other digital assets. This shift is attributed to a loss of confidence in stablecoins following the collapse of Silicon Valley Bank, which had significant exposure to Circle’s USDC.

Regulatory Oversight of Stablecoins in the U.S. is Reduced

The majority of stablecoin inflows to the 50 largest crypto services have shifted from U.S. licensed services to non-U.S. licensed services. This shift has reduced regulatory oversight of dollar-pegged stablecoins in the U.S. Despite several proposed bills by pro-crypto politicians, Congress has been slow to regulate and legitimize stablecoins. This lack of regulation poses challenges for the stability and growth of the cryptocurrency market in North America.

DeFi Adoption Continues to Grow

Despite regulatory challenges, DeFi adoption is still on the rise in North America. The report highlights that the overall on-chain value exchanged between July 2022 and June 2023 is estimated to be around $1.2 trillion, accounting for over 24% of the global figure. DeFi usage in the region has particularly increased in protocols with highly speculative trading.

The Importance of Crypto and Stablecoin Regulation

In summary, the regulation of cryptocurrencies and stablecoins will play a crucial role in reversing the decline in North America’s crypto activity. As the largest cryptocurrency market in the world, the United States needs clear and effective regulations to ensure the stability and growth of the industry.

– Chainalysis: [link to credible source]
– Cryptopotato: [link to credible source]

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J-S Tremblay
About the author - J-S Tremblay

I've been involved in the cryptocurrency world since 2016 and trading since 2019. I started Moon and Lambo in 2021. I'm passionate about crypto and love to share my knowledge. I hate bankers and I hope that cryptocurrency will change the financial world for the better. View full profile...

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