North America Leads in Global Crypto Usage, But Stablecoin Activity Shifts Away from US Services – Report

North America is the largest cryptocurrency market, according to Chainalysis.

Chainalysis reveals hat the region has “an estimated $1.2 trillion in value received on-chain between July 2022 and June 2023.” That total now “represents 24.4% of global transaction activity during the time period studied.”

Most of this activity is “driven by the United States, which ranks first overall worldwide. Canada also contributes significant transaction volume, placing seventh globally.”

As noted in the update from Chainalysis, North America’s crypto market is more “driven by institutional activity than any other region’s with a whopping 76.9% of transaction volume driven by transfers of $1 million or more.” The region’s on-chain activity is “split relatively evenly between DeFi and centralized exchanges.”

As they’ve seen in other regions, on-chain data suggests “that North American crypto activity has fallen over the last year, following negative developments such as the blowup of FTX in November of 2022.”

Interestingly, crypto activity contracted “more in the months immediately following the March banking crisis that saw Silicon Valley Bank and crypto-friendly banks Signature and Silvergate close down, and the ensuing temporary drop in USDC’s value in secondary markets. However, on-chain activity starts to tick back up beginning in June.”

As Chainalysis noted, transaction size data suggests “that pullback from institutional investors was the primary driver in the overall decline in activity, as retail users and sub-institutional pro traders’ estimated activity remained consistent.”

In line with a general trend seen around the world, Chainalysis also observed “a relative decline in North America’s stablecoin usage, compared to other digital assets, beginning around February 2023. Between then and June 2023, stablecoins fell from 70.3% to 48.8% of North America’s on-chain transaction volume.”

Despite the declines described, stablecoins are “the most widely-used type of crypto asset — Chainalysis data shows that more than half of all on-chain transaction volume to or from centralized services between June 2023 and July 2022 took place in stablecoins — and more than 90% of stablecoin activity takes place in stablecoins pegged to the U.S. dollar. U.S. regulators have a strong interest in exercising some regulatory authority over stablecoins, given the central role of USD-denominated reserves to these assets.”

Regulation will be key to crypto’s continued growth in the region

It’s not surprising that crypto activity “fell in North America in the last year as both transaction volume and grassroots adoption are down worldwide.”

Yet, in spite of transaction volume declining, North America still “ranked fourth in the 2023 Global Crypto Adoption Index.” As the region rebounds from crypto winter, regulation “will play an important role in its recovery.”

The U.S. Congress is working to advance two promising pieces of crypto legislation, and prominent regulators are committed to growing the ecosystem safely. CFTC Commissioner Caroline Pham recently shared that her organization could pilot a program to “support the development of compliant digital asset markets and tokenization.”

roactive approaches like these “show promise for the growth of crypto in North America and the world at large.”

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