According to a recent report by Chainalysis, the United States holds the position of the world’s largest cryptocurrency market, representing a significant 24.4% of global transaction activity.
The report, released on October 23, disclosed that an approximate value of $1.2 trillion was received on-chain in the U.S. between July 2022 and June 2023. Additionally, the report highlighted that institutional activity accounts for 76.9% of North America’s cryptocurrency transaction volume, with activity being distributed between centralized exchanges and decentralized finance (DeFi).
Shift Away of Stablecoins
However, the report also highlights a decline in crypto activity due to the ongoing regulatory crackdown on cryptocurrencies following the high-profile collapses witnessed last year. On-chain data indicates a decrease in North American crypto activity over the past year, particularly in the aftermath of the FTX blowup. Furthermore, this year saw a further decline in activity following the collapses of several major U.S. banks in March.
Moreover, the report reveals a shift away from stablecoin activity in America. It notes a relative decline in North America’s usage of stablecoins, compared to other digital assets, starting around February 2023. Confidence in stablecoins, such as Circle’s USDC, was shaken after the collapse of Silicon Valley Bank, where the firm had significant exposure. The majority of stablecoin inflows to the 50 largest crypto services have now moved from U.S. licensed services to non-U.S. licensed services. The report states that more crypto users are engaging in stablecoin-related activities with trading platforms and issuers based abroad, despite the initial involvement of U.S. entities in legitimizing and pioneering the stablecoin market. Additionally, this shift has resulted in reduced regulatory oversight of dollar-pegged stablecoins within the United States. Despite several proposed bills by pro-crypto politicians, Congress has been slow in implementing regulations and legitimizing stablecoins.
In summary, the regulation of cryptocurrencies and stablecoins will play a crucial role in reversing the declining trend in North America’s crypto market.
Continued Growth in DeFi Adoption
Nevertheless, despite the aforementioned regulatory challenges, DeFi adoption continues to experience growth in the North American region, as reported earlier this week. The estimated overall on-chain value exchanged between July 2022 and June 2023 amounts to approximately $1.2 trillion, accounting for just over 24% of the global figure. Additionally, DeFi usage within the North American region has shown a consistent increase in raw transaction volume, particularly for protocols involving highly speculative trading.