The United States is the largest cryptocurrency market in the world, accounting for 24.4% of global transaction activity, according to a recent report from Chainalysis.
The report, published on October 23, revealed that an estimated value of $1.2 trillion was received on-chain between July 2022 and June 2023 in the US.
Additionally, institutional activity accounts for 76.9% of North American crypto trading volume, with activity split between centralized exchanges and DeFi, it added.
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Stablecoins move away
However, he also reported that crypto activity is falling due to the continuous 'war against cryptocurrencies' by financial regulators in the wake of last year's high-profile collapses.
"On-chain data suggests that crypto activity in North America has fallen over the past year, following negative developments like the FTX explosion."
Activity has fallen further this year following the collapse of several major US banks in March.
Additionally, stablecoin activity is also moving away from the United States. โWe have also observed a relative decline in the use of stablecoins in North America, compared to other digital assets, starting in February 2023,โ the report notes.
Confidence in stablecoins like Circle's USDC was shaken following the collapse of Silicon Valley Bank, where the company had massive exposure.
Most stablecoin inflows to the 50 largest crypto services have shifted from US-licensed services to non-US-licensed services, he said.
โAlthough US entities originally helped legitimize and seed the stablecoin market, more cryptocurrency users are conducting stablecoin-related activities with foreign-based trading platforms and issuers.โ
Additionally, the change has reduced regulatory oversight of dollar-pegged stablecoins in the US.
Congress has been slow to regulate and legitimize stablecoins despite a series of bills proposed by pro-crypto politicians.
In short, regulation of cryptocurrencies and stablecoins will play an important role in reversing the downward trend in North America.
DeFi adoption continues to grow
Despite the aforementioned regulatory challenges, DeFi adoption is still on the rise in the North American region as reported earlier this week.
It is estimated that the total on-chain value that changed hands in the period between July 2022 and June 2023 was around $1.2 trillion, representing just over 24% of the global figure.
At the same time, DeFi usage in the North American region has continued to increase in terms of gross transaction volume, especially for protocols with highly speculative operations.
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