- US-regulated stablecoin transactions dropped from 50% in 2023 to below 40% in 2024.
- Non-US platforms saw over 60% of stablecoin activity in 2024, reflecting global adoption.
- Regulatory uncertainty in the US impacts its stablecoin market, allowing other regions to grow.
The United States has experienced a significant shift in stablecoin activity in 2024, with global markets taking the lead. While Bitcoin trading soared after the launch of spot BTC ETFs, stablecoin adoption on US-regulated exchanges has seen a notable decline. The share of stablecoin transactions in the US dropped from nearly 50% in 2023 to below 40% this year. Meanwhile, non-US regulated platforms captured over 60% of stablecoin inflows.
Chainalysis, in its October 17 report, highlighted that the decline in US stablecoin use is not necessarily a sign of weakening demand domestically. Instead, it reflects the expanding role stablecoins are playing in emerging markets. These markets are increasingly relying on US dollar-backed stablecoins as a stable store of value and a cheaper means of transferring assets.
Rising Global Demand for US Dollar-backed Stablecoins
Countries with limited access to stable currencies are leading the shift in stablecoin use, with demand for US dollar-backed assets growing worldwide. According to estimates from the US Federal Reserve, more than $1 trillion in US dollar banknotes were held outside the United States by the end of 2022. This trend is being mirrored in the adoption of stablecoins, which offer a digital alternative to the physical US dollar.
Stablecoin inflows to non-US-regulated exchanges have continued to increase, highlighting the role these platforms play in facilitating global crypto transactions. In particular, developing economies such as Argentina, Turkey, and Vietnam have emerged as key markets for stablecoin use, according to Tether CEO Paolo Ardoino.
Regulatory Uncertainty Hurts US Stablecoin Leadership
Another major factor in the shift is the regulatory uncertainty surrounding stablecoins in the US. With no clear framework in place, American companies such as Circle have noted that Europe and the UAE are becoming more attractive regions for stablecoin projects due to their more welcoming regulatory environments.
Chainalysis noted that US policymakers are now facing pressure to create a stable regulatory environment or risk losing further ground in the global stablecoin market. Circle echoed this sentiment, warning that the absence of regulations for dollar-referenced stablecoins poses a threat to the country’s financial interests.
