US Stablecoin Adoption Falls as Global Demand Rises: Chainalysis

Highlights:

• US stablecoin adoption lags due to regulatory uncertainty amid global demand.
• Stablecoin transactions on US platforms dropped below 40% in 2024.
• North America accounted for $1.3 trillion in on-chain value over the past year, leading global activity.

According to Chainalysis’ latest report on crypto adoption trends in North America, the US is lagging in stablecoin adoption due to regulatory uncertainty, while global demand for US dollar-backed stablecoins is increasing. In contrast, the country has seen a record surge in Bitcoin (BTC) activity after the launch of spot Bitcoin exchange-traded funds (ETFs).

JUST IN: U.S. STABLECOIN ADOPTION IN 2024 FALLS BEHIND GLOBAL MARKETS, CHAINALYSIS REPORTS

— BSCN Headlines (@BSCNheadlines) October 17, 2024

In 2024, stablecoin transactions on US platforms dropped to below 40%, down from 50% the previous year. Meanwhile, non-US platforms exceeded 60%, driven by emerging markets such as Argentina and Turkey. Chainalysis stated the shift doesn’t indicate a sharp drop in US stablecoin activity. Instead, it reflects the growing role of stablecoins in emerging markets and non-US regions.

Regulatory Challenges Threaten US Leadership in Stablecoin Adoption

Regulatory uncertainty in the US is slowing stablecoin adoption. Chainalysis points out that regions like Europe and the United Arab Emirates are attracting stablecoin projects with friendlier regulations. Circle, a leading stablecoin issuer, has warned that the unclear US regulatory framework threatens the country’s leadership in this area.

Countries worldwide are creating regulatory frameworks to encourage stablecoin adoption. US policymakers face growing pressure to establish clear regulations. Chainalysis’ report highlights that the US risks losing its leadership in stablecoin adoption to more supportive financial hubs without a strong regulatory framework.

North America Dominates Cryptocurrency Activity Despite Regulatory Uncertainty

Cryptocurrencies continue to concentrate in North America despite the uncertain regulatory environment. Recent data from Chainalysis shows that the continent received $1.3 trillion in on-chain value, accounting for 22.5% of global activity between July 2023 and June this year. Analysts report that institutional investors mainly drive the landscape. 

They note that about 70% of the region’s crypto activity involves transfers exceeding $1 million. While US markets are the largest globally, they are also more volatile in terms of growth. However, the US markets have faced challenges in the past year, especially as stablecoin activity has moved away from US-regulated platforms.

Chainalysis stated:

“In recent quarters, the U.S. has demonstrated heightened sensitivity to both bull and bear markets. When cryptocurrency prices rise, the U.S. market shows larger increases in growth than the global market — and the inverse is true when cryptocurrency markets decline.”

Tether USDT’s Oustanding Growth

The USDT stablecoin from Tether Holdings has achieved significant global usage, with 330 million users recorded by the third quarter of 2024. This number is comparable to the US population, showcasing USDT’s widespread adoption. The 330 million users reflect on-chain account holders and exclude those using USDT on centralized platforms.

Tether reports growth in USDT usage on Telegram's TON blockchain

Stablecoin issuer Tether announced on its official site that by the end of Q3, 330 million on-chain wallets and accounts had received USDT, marking substantial adoption equivalent to the U.S. population. This…

— CoinNess Global (@CoinnessGL) October 16, 2024

With a circulating supply of 119 billion, the actual user count is likely even higher, as USDT’s user base has consistently grown each quarter. The last four quarters have seen an average growth of 9%. Q3 2024 recorded the highest user count at 36.25 million. USDT’s rapid growth is driven by its availability on multiple blockchains, including TON, Tron, Binance Smart Chain, Polygon, and Ethereum.