Stablecoin transactions have slowed significantly on U.S.-regulated exchanges compared to global markets, according to a report from blockchain analytics firm Chainalysis.
Chainalysis reveals that the share of stablecoin transactions on U.S. exchanges dropped from nearly 50% in 2023 to under 40% in 2024.
Meanwhile, non-U.S. regulated platforms have seen a rise in stablecoin activity, surpassing 60% of global transactions this year.
The report suggests that this shift doesn’t necessarily mean a sharp decline in the U.S. market — instead, it points to the expanding role of stablecoins in emerging markets and regions beyond U.S. jurisdictions.
Global Demand for U.S. Dollar-Backed Assets Grows
Chainalysis said that one key reason behind the growing adoption of stablecoins outside the U.S. market is the rising global demand for U.S. dollar-backed assets, especially in countries where stable currencies are less accessible.
It can be hard to hold physical USD in your bank account in countries where rising inflation or hyperinflation makes saving in the U.S. dollar a good idea. But a stablecoin can be much more accessible.
The firm noted that, as of late 2022, over $1 trillion in U.S. dollar banknotes, about half of the total outstanding, were held outside the U.S., indicating a global reliance on the dollar for stability.
Chainalysis said:
“The growth in stablecoin usage outside the U.S. reflects a broader trend where international markets, faced with currency volatility, are turning to dollar-denominated stablecoins to preserve value and facilitate faster, cheaper transactions.
“Stablecoins, such as USDC and USDT [Tether] offer a compelling solution by providing access to the stability of the U.S. dollar without requiring access to traditional banking rails, which are often more difficult to access outside of the United States.”
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Regulatory uncertainty around stablecoins in the U.S. is another factor affecting adoption rates. The report cited comments from stablecoin issuer Circle, which pointed out that the absence of clear regulations in the U.S. has allowed financial centers in Europe and the UAE to attract stablecoin projects with more favorable policies.
Circle warned that the lack of a U.S. regulatory framework for dollar-pegged stablecoins could undermine American interests.
A Circle spokesperson told Chainalysis:
“Europe, through its MiCA framework, has succeeded in doing what the U.S. has yet to achieve: providing legal and regulatory clarity for the entire digital asset market.”
The report warned that the U.S. risks losing influence over the future role of the dollar in digital commerce if it fails to provide regulatory clarity for stablecoins. This situation mirrors the historical growth of Eurodollars, which gained international prominence despite initial U.S. policy neglect.
Nevertheless, Chainalysis mentioned that the U.S. is not without progress on stablecoins entirely. Last year, U.S. House lawmakers cleared stablecoin legislation for the next step in its route through Congress.
North America Becomes World’s Largest Cryptocurrency Market
The Chainalysis report also revealed that North America has emerged as the world’s largest cryptocurrency market. The region accounts for 22.5% of global crypto activity, with an estimated $1.3 trillion in on-chain value from July 2023 to June 2024.
The report said that North America’s dominance is largely driven by institutional activity. 70% of crypto transfers exceed $1 million, showcasing the influence of major financial players.
The United States, in particular, has played a pivotal role in this growth.
The key driver behind North America’s growing role in the crypto market this year has been the January approval of spot Bitcoin exchange-traded funds (ETFs).
The ETFs have attracted significant institutional interest, with financial giants like BlackRock, Fidelity, and Goldman Sachs taking prominent positions in the market.
“The U.S. launch of bitcoin ETPs — and spot ether ETPs months later — marks a pivotal moment in the TradFi-crypto convergence, primarily because it influenced institutional interest and broader market sentiment,” the report said.
The report added that Canada’s market closely follows U.S. trends but with less volatility. It noted that while regulatory challenges led major exchanges to exit Canada, the departure of these exchanges might stem from broader business decisions rather than an unworkable framework.
“Canadian regulators have provided more clarity to crypto exchanges than other North American jurisdictions by introducing the concept of crypto contracts, which clarifies the applicability of securities regulations for crypto platforms,” Kunal Bhasin, Partner & Co-lead at KPMG’s Digital Assets Center of Excellence, Advisory Services, said.
The Bottom Line
Stablecoin adoption in the U.S. has slowed in 2024 compared to global markets.
According to Chainalysis, regulatory uncertainty has been a key factor affecting adoption rates, even pushing some firms to move their operations offshore.
The dollar is the dominant currency in the world, and stablecoins add to that reality. It would be a strange loss for the U.S. if they lost that status by not realizing the power of USD stablecoins. It looks like their race to lose at the moment.