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The United States holds the position of the largest cryptocurrency market globally, representing 24.4% of worldwide transaction activity, as indicated by a recent Chainalysis report.
The report, published on October 23, disclosed that approximately $1.2 trillion in value was transferred on-chain in the U.S. from July 2022 to June 2023.
Furthermore, institutional involvement constitutes 76.9% of North America’s crypto transaction volume, with activities divided between centralized exchanges and decentralized finance (DeFi), it noted.
Stablecoins Shift Away
Nonetheless, it also highlighted a decline in crypto activity attributed to the ongoing ‘war on crypto’ by financial regulators following last year’s notable collapses.
“On-chain data indicates that North American crypto activity has decreased over the past year, in light of adverse events such as the collapse of FTX.”
Activity has further diminished this year after the failures of several major banks in the U.S. in March.
Additionally, stablecoin activity is also moving away from the United States. “We’ve noted a relative decrease in North America’s stablecoin usage compared to other digital assets, starting around February 2023,” the report stated.
Trust in stablecoins like Circle’s USDC was shaken following the downfall of Silicon Valley Bank, where the firm had significant exposure.
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The majority of stablecoin inflows to the 50 largest crypto services have transitioned from U.S.-licensed services to those not licensed in the U.S., it mentioned.
“While U.S. entities initially played a role in legitimizing and establishing the stablecoin market, an increasing number of crypto users are engaging in stablecoin-related activities with trading platforms and issuers based overseas.”
Moreover, this shift has led to a decrease in regulatory oversight of dollar-pegged stablecoins within the U.S.
Congress has been slow to regulate and legitimize stablecoins, despite several bills introduced by pro-crypto lawmakers.
In conclusion, the regulation of crypto and stablecoins will be crucial in reversing the trend of declines in North America.
DeFi Adoption Still Grows
In spite of the regulatory hurdles mentioned, DeFi adoption continues to rise in the North American region, as reported earlier this week.
The total on-chain value exchanged between July 2022 and June 2023 is estimated to be around $1.2 trillion, which accounts for just over 24% of the global total.
Simultaneously, DeFi usage in North America has consistently increased in terms of raw transaction volume, particularly for protocols with highly speculative trading.
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