North America Is Largest Crypto Market Despite Regulatory Uncertainty, Chainalysis Reports

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North America leads in terms of cryptocurrency usage despite the ongoing regulatory uncertainty, blockchain forensics firm Chainalysis revealed. Meanwhile, stablecoin-related activity has been decreasing with users shifting away from U.S.-based services. The region’s share in decentralized finance (defi) usage has declined as well.

Institutional Crypto Activity Plays Bigger Role in North America Than Other Regions, Chainalysis Says

With around $1.2 trillion in value received on-chain between July 2022 and June 2023, North America is the world’s largest crypto market, according to Chainalysis. The conclusion comes from the company’s 2023 Geography of Cryptocurrency Report.

The estimated total represents 24.4% of the global transaction activity during the studied period. The authors also found that institutions move North America’s crypto market more than that of any other region with nearly 77% of the transaction volume driven by transfers of at least $1 million.

The United States is the main driver of this activity with a significant contribution from Canada in terms of transaction volume, the blockchain analytics firm pointed out. The U.S. also ranks first overall worldwide, according to an excerpt from the report published Monday.

In general, North American crypto activity for the whole period has fallen. The trend, observed in other regions as well, developed after a string of negative events over the past year such as last November’s collapse of crypto exchange FTX and the troubles with crypto-friendly banks in the U.S. The overall decline has been attributed largely to institutional investors pulling back from the market.

Meanwhile stablecoin usage has also decreased. Between February 2023 and June 2023, stablecoins fell from over 70% to below 49% of North America’s on-chain transaction volume with activity shifting to non-U.S. licensed platforms.

While stablecoins remain the most widely used crypto asset on the continent and over 90% of stablecoin activity is associated with stablecoins pegged to the U.S. dollar, the United States may be losing regulatory oversight of the stablecoin market, Chainalysis noted, elaborating:

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.

North America is still a leader in defi usage but its share of the global activity in this space has fallen significantly during the examined period, the report revealed. The region’s on-chain activity has been split evenly between defi and centralized exchanges, the authors said.

On a positive note, Chainalysis has also found that on-chain crypto activity has started to gradually increase since June of this year. Its analysts believe that regulation will be a key factor for the continued growth of crypto in North America.

“As the region rebounds from crypto winter, regulation will play an important role in its recovery,” the company said. The statement comes amid criticism from the industry over the current regulatory approach by U.S. authorities which favors enforcing existing rules through courts rather than adopting crypto-specific regulations. This has already convinced major U.S. players to seek expansion elsewhere.

Do you think North America will remain the leading region in terms of crypto usage? Share your thoughts on the Chainalysis report in the comments section below.