- The US remains the largest crypto market globally, accounting for 24% of transaction activity, though activity has declined due to regulatory crackdowns following crypto collapses.
- Institutional activity makes up 76% of North America’s crypto volume, though stablecoin activity is shifting away from the US after confidence was shaken by Silicon Valley Bank’s collapse.
- DeFi adoption is still rising in North America despite regulatory challenges, especially for protocols with speculative trading.
The United States is still the largest cryptocurrency market in the world, accounting for 24% of global transaction activity according to a recent report by Chainalysis. The report, released on October 23rd, revealed that there was an estimated $12 trillion in value received on-chain between July 2022 and June 2023 in the US.
North American Institutional Activity
Stablecoin Activity Shifting Away from the US
However, the report also stated that crypto activity is falling due to the ongoing regulatory crackdown following last year’s high-profile collapses. On-chain data suggests that North American crypto activity has declined over the last year after negative developments like the FTX blowup.
Activity has fallen further this year following the collapse of several major crypto companies in the US in March.
Moreover, stablecoin activity is also shifting away from America. “We’ve also observed a relative decline in North America’s stablecoin usage compared to other digital assets beginning around February 2023,” the report noted.
Confidence in stablecoins like Circle’s USDC was shaken after Silicon Valley Bank‘s collapse, where Circle had massive exposure. The majority of stablecoin inflows to the 50 biggest crypto services have shifted from US licensed services to non-US licensed services, it said.
Though US entities helped legitimize stablecoins, more crypto users are pursuing stablecoin activity with non-US platforms and issuers, reducing regulatory oversight of dollar-pegged stablecoins in the US.
The Need for Stablecoin Regulation
Congress has failed to regulate stablecoins despite several proposed bills. In summary, crypto and stablecoin regulation will play an important role in reversing declining activity trends in North America.
DeFi Adoption Still Growing
Despite regulatory challenges, DeFi adoption is still rising in North America. The overall on-chain value between July 2022 and June 2023 is estimated at over $12 trillion, just over 24% of the global number.
At the same time, DeFi usage has continued increasing in North America, especially for protocols with speculative trading.