Recent reports reveal a surprising trend in the cryptocurrency market: while stablecoin usage is declining in the United States, it is experiencing significant growth in developing nations. The emergence of spot Bitcoin exchange-traded funds (ETFs) in the U.S. has resulted in record trading volumes for Bitcoin, yet stablecoin transactions have seen a stark downturn this year, particularly in the American market.
U.S. Stablecoin Usage Declines
According to a Chainalysis report released on October 17, the rate of stablecoin transactions in the U.S. has decreased compared to 2023. The percentage of these transactions on American exchanges dropped from approximately 50% last year to below 40% in 2024. Conversely, stablecoin transactions on international exchanges have surged, exceeding 60% during the same timeframe.
What Factors Drive Global Demand?
This decline in U.S. stablecoin usage does not indicate an overall downturn but rather highlights the rapid expansion of stablecoins in emerging markets. Demand for U.S. dollar-backed stablecoins is particularly high in these regions, driven by lower transaction costs and the necessity for value preservation.
Key conclusions from the findings include:
- The U.S. market is losing stablecoin transaction share to global exchanges.
- Emerging economies favor stablecoins for their cost-effectiveness.
- Regulatory uncertainty in the U.S. may hinder its competitive edge.
The situation illustrates the urgent need for U.S. policymakers to address regulatory ambiguity surrounding stablecoins. If not rectified, the U.S. risks losing its leadership position in the stablecoin market, especially as other nations develop clearer frameworks that promote stablecoin adoption.