Chainalysis, a blockchain analytics firm, has reported an increasing amount of stablecoin activity occurring through entities not licensed in the United States.
A recent Chainalysis report suggests that the stablecoin market may be slipping from the control of the US government.
According to the report, entities outside the United States are becoming hosts to stablecoin activity, and a significant portion of these entities operate without regulation or licenses in the US.
Chainalysis’ report identifies a shift in the source of stablecoin inflows to the top 50 crypto services. While previously, licensed US services primarily sourced stablecoins, the majority now originate from unlicensed non-US services since spring 2023.
As of June 2023, the Chainalysis report reveals that approximately 55% of stablecoin inflows to the top 50 crypto services were directed to exchanges not licensed in the US.
The report highlights a diminishing ability of the US government to regulate the stablecoin market, resulting in missed opportunities for US consumers to engage with regulated stablecoins.
“Though U.S entities originally helped legitimize and seed the stablecoin market, more crypto users are pursuing stablecoin-related activity with trading platforms and issuers headquartered abroad,” Chainalysis wrote.
Congress is currently deliberating on various bills related to stablecoin regulation, including the Clarity for Payment Stablecoins Act and the Responsible Financial Innovation Act, as mentioned in the report.
Despite the decline in licensed stablecoin activity in the United States, North America has emerged as the largest crypto market, receiving an estimated $1.2 trillion in inflows between July 2022 and June 2023.
North America’s crypto market is significantly driven by institutional activity, with a remarkable 76.9% of the region’s crypto transaction volume involving transfers of $1 million or more.
The region accounted for 24.4% of the total transaction volume on a global scale during the time frame, surpassing Central, Northern, and Western Europe, which collectively received an estimated $1 trillion, according to Chainalysis.
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