A recent report by Chainalysis has unveiled that the United States stands as the epicenter of global cryptocurrency activity, boasting an impressive transaction volume exceeding $1 trillion from July 2022 to June 2023.
The report further highlights that the U.S., in conjunction with Canada, collectively contributes to nearly a quarter of the world’s total transaction volume in the crypto sphere.
Notably, this thriving crypto landscape owes much of its momentum to large institutional investors, who are at the helm of the action. According to Chainalysis, a remarkable 76.9% of the transaction volume in the region involves transfers of $1 million or more, as elucidated in a blog post by the company published on Monday.
The report also delves into the fluctuations in activity within the region, which saw a contraction following the turbulence surrounding the FTX exchange, as well as the commencement of the criminal trial of its former CEO, Sam Bankman-Fried.
Interestingly, these events appeared to have had a milder impact on the industry compared to the banking crisis in March, when regulatory actions led to the shutdown of Silicon Valley Bank and subsequent measures against other crypto-friendly banks such as Silvergate and Signature.
Chainalysis observes that the rebound in on-chain activity began in June, and it suggests that the primary cause for the overall decline in activity was the pullback of institutional investors, while the estimated activity of retail users and sub-institutional professional traders remained relatively stable during this period.
A Shift in Stablecoin Usage
The same banking upheaval is noted to have influenced stablecoin usage in North America. Chainalysis reports that stablecoin use has decreased from 70.3% to 48.8% of the region’s on-chain transaction volume over the past year, coinciding with the sector’s market capitalization reaching its lowest point in over two years this past summer.
Furthermore, there has been a shift away from U.S.-licensed services in the realm of stablecoins, marking a reversal of the trend observed late in the previous year. Currently, more than half of all stablecoins traded are flowing to non-U.S. licensed exchanges, as highlighted in the report.
Chainalysis emphasizes the interest of U.S. regulators in asserting regulatory control over stablecoins, primarily due to the significant role of USD-denominated reserves in these assets.
This regulatory scrutiny also presents an opportunity for regulators to ensure that the United States remains a hub for cryptocurrency businesses that are poised to shape the global utilization of the U.S. dollar within the expanding digital economy.
Nevertheless, the report indicates that an increasing proportion of stablecoin activity is occurring through entities that operate outside the purview of U.S. licenses.
Global DeFi Dominance in North America
According to Chainalysis, North America continues to dominate the global decentralized finance (DeFi) landscape in terms of volume. However, the share of decentralized protocols in the overall volume has experienced a decline over the past year. As of June, on-chain activity in the United States and Canada was fairly evenly distributed between DeFi platforms and centralized exchanges, as highlighted by Chainalysis.