Stablecoin market slipping away from US regulation, says Chainalysis

Key Takeaways:

- A new report by Chainalysis suggests that the US government is losing control over the stablecoin market.

- The majority of stablecoin inflows to the top 50 cryptocurrency services are now going to non-US-licensed exchanges.

- Despite this, North America remains the largest cryptocurrency market, receiving an estimated $1.2 trillion in transactions.

The stablecoin market is slipping away from US regulatory oversight, with the majority of stablecoin inflows going to non-US-licensed exchanges, according to a report by blockchain research firm Chainalysis. The study reveals that since spring 2023, stablecoin activity has increasingly occurred through entities that are not licensed in the United States. As of June 2023, around 55% of stablecoin inflows to the top 50 cryptocurrency services were going to non-US-licensed exchanges. This trend highlights the potential loss of regulatory control by the US government in the stablecoin market.

Chainalysis also suggests that US consumers may be missing out on opportunities to engage with regulated stablecoins due to the lack of oversight. While US entities initially helped legitimize and seed the stablecoin market, more crypto users are now turning to trading platforms and issuers headquartered abroad. The report notes that US lawmakers have yet to pass stablecoin regulations, with bills like the Clarity for Payment Stablecoins Act and the Responsible Financial Innovation Act still under consideration in Congress.

Despite the decline in licensed stablecoin activity in the United States, North America has emerged as the largest cryptocurrency market. According to Chainalysis, the region received an estimated $1.2 trillion in transactions between July 2022 and June 2023, accounting for 24.4% of global transaction volume during that period. This surpasses the regions of Central, Northern, and Western Europe, which received an estimated $1 trillion in transactions.