Stablecoin Use Drops on US Exchanges as Global Platforms See Surge in 2024

The United States has witnessed increased demand for Bitcoin since the launch of spot BTC ETFs in January. These financial products attracted significant interest from investors.

However, a recent report revealed that the adoption of stablecoins in the US has stalled in 2024. This decline is notable when compared to trends in global markets.

Chainalysis Report Reveals Increasing Global Demand for Stablecoins

Chainalysisreporthighlights a significant change in stablecoin activity in US markets this year. According to the report, the percentage of stablecoin transactions on U.S.-regulated exchanges has dropped.

In 2023, stablecoin transactions made up about 50% of the transactions on the U.S.-regulated exchanges. However, the number dropped below 40% in 2024, indicating a shift in how people use stablecoins in the US.

In contrast to the US, stablecoin transactions on non-U.S. regulated platforms have grown significantly. This increase started in 2023 and continued into 2024.

According to Chainalysis's latest report on crypto adoption trends in North America,these transactions have now surpassed 60%. This means more people are using stablecoins on platforms outside the US. While the US market is declining, other markets are increasingly embracing stablecoins.

Also, Chainalysis highlighted an important point about the shift in stablecoin activity. They explained that this change does not mean a big drop in stablecoin use in the US. Instead, it shows the role of stablecoins in other markets has expanded significantly.

Furthermore, one reason for the change in global stablecoin use is the growing demand for US dollar-backed assets. This is especially true in countries facing high inflation and currency devaluation.

The report pointed out some interesting statistics. As of late 2022, over $1 trillion in US dollar bank notes were held outside the United States as officially estimated by the US Federal Reserve. This amount is roughly half of all the US dollar notes in existence.

These numbers show that many people and businesses worldwide prefer to hold US dollars. They seek stability in their finances, driving the demand for stablecoins backed by the United States dollar.

Pressure on US Policymakers: The Need for Clear Regulations in the Growing Stablecoin Market

The increasing use of stablecoins outside the US shows a broader trend. Global markets are increasingly turning to US dollar-backed stablecoins. Moreover, people see these stablecoins as a safe way to store value and perform transactions at cheaper costs.

Chainalysis's findings support this idea. They reflect what Tether CEO Paolo Ardoino said in early October. He mentioned that the primary demand for stablecoins comes from developing countries. Countries like Argentina, Turkey, and Vietnam are leading in this demand, not the United States.

Regulatory uncertainty about stablecoins and digital assets is another reason the US is falling behind other countries in adopting stablecoins.

Chainalysis reported that the stablecoin firm Circle pointed out a big problem.It says the US's lack of clear crypto rules is pushing stablecoin projects to other financial hubs.

Meanwhile, European countries and the United Arab Emirates have more friendly regulations, which attract these projects.

A spokesperson from Circle raised a warning in the report. They warned that the absence of a US regulatory framework for dollar-referenced stablecoins threatens American interests.

As more countries create regulations that support stablecoin use, US policymakers feel growing pressure to take action. Chainalysis suggests that if the US does not respond soon, it may lag in the stablecoin market.

The post Stablecoin Use Drops on US Exchanges as Global Platforms See Surge in 2024 appeared first on The Tech Report.