US Stablecoin Share Falls Below 40% in 2024: Chainalysis

US Stablecoin Market Faces Decline Amid Global Shift: Chainalysis

The United States has experienced a record surge in Bitcoin activity following the launch of spot Bitcoin exchange-traded funds (ETFs). Despite this, stablecoin adoption in the country has slowed in 2024 compared to global markets, according to an Oct. 17 report from Chainalysis. This marks a notable shift in the dynamics of the cryptocurrency market, particularly in the use of stablecoins.

Stablecoin Activity Shifts Away from US-Regulated Exchanges

The report highlighted a significant change in stablecoin activity in the US, with the share of stablecoin transactions on US-regulated exchanges dropping from roughly 50% in 2023 to below 40% in 2024. Meanwhile, non-US regulated platforms saw a surge in stablecoin transactions, now making up over 60% of the global total. This shift reflects the growing role of stablecoins in emerging markets, where stablecoin usage is expanding rapidly.

Global Demand for US Dollar-Backed Assets on the Rise

One key driver of this shift is the increasing demand for US dollar-backed stablecoins outside the US. The Chainalysis report pointed out that as of late 2022, approximately half of the total US dollar banknotes, or over $1 trillion, were held outside the United States. This highlights the global preference for US dollar-backed assets, particularly in countries with less stable currencies, where stablecoins are being used as a store of value and for cost-effective transactions.

Regulatory Uncertainty Hurts US Stablecoin Leadership

Regulatory uncertainty in the US surrounding stablecoins is another major factor contributing to the slowdown in adoption. Chainalysis noted that other regions, such as Europe and the United Arab Emirates, are attracting stablecoin projects by offering more favorable regulatory environments. Circle, a major stablecoin issuer, warned that the lack of a clear US regulatory framework poses a threat to the country's leadership in this space.

The US Faces Pressure to Act as Global Stablecoin Adoption Grows

As countries around the world continue to develop regulatory frameworks that promote stablecoin adoption, US policymakers are under increasing pressure to provide clear regulations. Chainalysis’ report underscores that without a solid regulatory framework, the US risks losing its leadership in stablecoin adoption to other financial hubs that are more supportive of digital asset growth.

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