Chainalysis: USA lagging in the adoption of stablecoin

A recent report by Chainalysis reveals that the USA is lagging behind in the adoption of stablecoins compared to other countries. 

Despite this, North America remains the largest crypto market globally, as in previous years, with an estimated $1.3 trillion in on-chain value received between July 2023 and June 2024, equal to 22.5% of all volume globally.

Chainalysis research on stablecoin adoption in the USA

The research by Chainalysis is called Geography of Cryptocurrency 2024, and it has been made available for free to everyone upon registration.

This is a PDF that is as long as 134 pages, in which many metrics concerning the crypto market in the various continents are analyzed. 

Specifically, it is an analysis of regional trends regarding the adoption of criptovalute.

From the point of view of mere adoption, the leading region worldwide actually turns out to be Central and Southern Asia and Oceania. But it must also be said that more population lives in this area than in any other region of the world. 

At the top of the 2024 Global Crypto Adoption Index is India, which is the most populous country in the world, followed by Nigeria, which is the most populous country in Africa. 

The USA, however, are in fourth place, behind Indonesia. 

The report also highlights that between the fourth quarter of 2023 and the first quarter of 2024, the total value of global activity on cryptocurrencies increased substantially, reaching levels higher than those recorded during the great bullrun of 2021. 

The crypto landscape in the USA

As already mentioned, the USA turns out to be the fourth country in the world for crypto adoption. 

The reason they are only fourth is that they do not have a high volume of crypto received from retail through centralized services. In the other metrics, however, they always rank in the top 5 places. 

The thing that surprises the most is that they are second overall for the total volume of crypto received through centralized services, while they are only 12th for the same volume measured, however, only on retail users. 

This means that on centralized platforms, such as exchanges, the ones moving the largest volumes in the USA are not ordinary citizens, but the whales, and in particular the professional operators. 

In fact, the dominance of North America in the crypto market is largely due to institutional activity, more than in any other region, with about 70% of North America’s crypto activity consisting of transfers over 1 million dollars. 

In light of this, it is not surprising that the discussion regarding stablecoin is different, given that institutions use real dollars, and not crypto tokens collateralized in dollars.

The stablecoin in USA according to the study by Chainalysis

On page 19 of the report, there is an entire chapter dedicated to the adoption of stablecoins in the USA.

The report states that the growth of stablecoins has practically stalled in the U.S. market, despite record activity.

The cause of this discrepancy, according to Chainalysis, could be due to the barriers imposed by the slow regulatory progress on stablecoins and on digital assets in a broader sense.

In fact, until 2023 the share of stablecoin transactions on regulated exchanges in the USA was constantly increasing, in line with the increase in the adoption of stablecoin globally. However, in 2024 this trend began to reverse.

Chainalysis, however, specifies that this decline is probably only relative (that is, in percentage), and not absolute (in volumes), and should have been caused simply by a greater percentage increase in the adoption of stablecoins in emerging markets. 

Furthermore, more stablecoin transactions now occur in the United States on unregulated exchanges. 

The other markets

So actually even in the USA the adoption of stablecoins is increasing, but less than it is increasing elsewhere. This reduces the percentage of adoption in the USA even if the volumes are growing. 

In particular, the report by Chainalysis highlights that in emerging markets, and in non-U.S. jurisdictions, the role of stablecoins is rapidly expanding. 

In short, for stablecoins this is the time to grow, especially outside the USA. 

Chainalysis also reports having spoken with Circle, the issuer of USDC, which highlighted the growing global demand for assets backed by the US dollar, particularly among populations outside traditional banking systems, where access to stable currency is limited.

Therefore, where the dollar can be used easily, stablecoins grow less, while where the dollar is difficult to use, and local fiat currencies are weak, stablecoins are growing significantly. In fact, the growth in the use of stablecoins outside the USA reflects a broader trend that sees international markets, faced with the volatility of local currencies, increasingly turning to dollar-denominated stablecoins to preserve value and facilitate faster and more economical transactions. 

Regulatory Uncertainty

To all this must be added that regulatory uncertainty in the United States is threatening the country’s leadership in the stablecoin sector. 

Circle itself, which is American, emphasized that the absence of clear regulations in the USA has allowed other financial centers, such as the European Union (EU), the United Arab Emirates (UAE), Singapore, and Hong Kong, to attract stablecoin projects with more favorable regulatory frameworks. 

They write: 

“Europe, through its MiCA framework, has managed to achieve what the United States has yet to accomplish: providing legal and regulatory clarity for the entire digital asset market”.

It would be precisely this regulatory clarity that would fuel the growth of stablecoins globally, while the USA from this point of view risks falling behind.