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The Crypto Landscape in North America: Regulatory Challenges and DeFi Resilience

North America’s Continued Crypto Dominance

Despite Regulatory Headwinds, North America Reigns

Despite an ongoing regulatory crackdown, North America stands firm as the world’s largest market for cryptocurrencies. The United States, in particular, takes the lead, contributing 24.4% of global transaction activity, as reported by Chainalysis in their recent findings.

A Glimpse at the Numbers

Significant On-Chain Activity in the U.S.

In the period from July 2022 to June 2023, the U.S. witnessed an estimated $1.2 trillion in on-chain transaction value, underlining its dominant position in the crypto market. Notably, a substantial 76.9% of crypto transaction volume in North America comes from institutional activity, spanning both centralized exchanges and DeFi platforms.

Shifting Stablecoin Dynamics

Challenges Amid Regulatory Vigilance

Despite North America’s crypto prominence, the region faces a downturn in crypto activity, partly attributed to regulatory pressures, often referred to as the ‘war on crypto.’ The past year has seen a decline in North American crypto activity, fueled by significant events like the FTX debacle.

Stablecoin Exodus

Moreover, there is a discernible shift in stablecoin usage, with the spotlight moving away from the United States. This trend began in February 2023, highlighting a relative decline in North America’s stablecoin activity compared to other digital assets.

Confidence in stablecoins, notably Circle’s USDC, took a hit following the collapse of Silicon Valley Bank, where the exposure was substantial. Consequently, the majority of stablecoin inflows to the 50 largest crypto services have shifted from U.S. licensed platforms to non-U.S. licensed counterparts.

Regulatory Oversight Eases

Reduced Regulatory Scrutiny of Dollar-Pegged Stablecoins

This shift has also resulted in a reduction in regulatory oversight of dollar-pegged stablecoins within the U.S. Congress, despite several bills proposed by pro-crypto politicians, has been slow to formalize stablecoin regulation.

In conclusion, the regulatory landscape for both cryptocurrencies and stablecoins will play a pivotal role in addressing the declining trends observed in North America.

Unwavering DeFi Adoption

Resilient DeFi Growth

Despite the regulatory headwinds, DeFi adoption continues to thrive in the North American region. Over the period spanning July 2022 to June 2023, the on-chain value transacted amounted to approximately $1.2 trillion, representing over 24% of the global total.

Simultaneously, DeFi utilization in North America remains on an upward trajectory, primarily driven by raw transaction volume, especially in protocols with speculative trading features.

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