David Edwards
The United States has witnessed record Bitcoin activity following the introduction of spot Bitcoin exchange-traded funds (ETFs). However, the nation’s adoption of stablecoins has notably slowed in 2024, lagging behind global markets, according to an October 17 report by Chainalysis.
Stablecoin transaction volumes on US-regulated exchanges dropped significantly this year, with the market share falling from approximately 50% in 2023 to below 40% in 2024. Meanwhile, non-US regulated platforms have seen a surge in stablecoin activity, surpassing 60% of total transactions in 2024.
Chainalysis clarified that this shift doesn’t necessarily suggest a sharp decline in US activity but underscores the rapid growth of stablecoin usage in emerging markets and outside the United States.
Rising Global Demand for US Dollar-Backed Stablecoins
A key driver behind this global shift is the increasing demand for US dollar-backed stablecoins in countries with limited access to stable currencies. As of late 2022, the US Federal Reserve estimated that over $1 trillion in US dollar banknotes were held outside the country, illustrating the global appetite for dollar-denominated assets.
This demand is further reflected in the growing adoption of stablecoins as a means for cheaper transactions and as a store of value in global markets, especially in developing economies such as Argentina, Turkey, and Vietnam.
Regulatory Uncertainty Hurts US Stablecoin Leadership
Regulatory uncertainty in the US is another factor contributing to the country’s declining share in the global stablecoin market. Crypto firms, including stablecoin issuer Circle, have warned that the lack of clear regulatory guidelines in the US is allowing financial centers in Europe and the UAE to attract stablecoin projects with more favorable frameworks.
As more countries establish supportive regulatory structures for stablecoins, US policymakers face increasing pressure to develop a clear regulatory framework to maintain leadership in this critical segment of the digital asset market.
