In recent years, the demand for stablecoins in the United States has decreased, despite their increased use globally. Several factors influence this trend, including the management of virtual assets and the absence of clear regulatory frameworks in the US.

Decline in Stablecoin Demand in the US

The US has seen a significant decline in stablecoin market activity. According to a report by Chainalysis, the share of stablecoin transactions on US exchanges decreased by nearly 50% last year and another 40% this year. Nevertheless, Bitcoin activity reached record levels following the introduction of ETFs.

Global Growth in Stablecoin Utilization

Globally, the demand for US dollar-powered assets has been rising significantly, impacting how countries perceive stablecoins. Argentina, Turkey, and Vietnam top the list for stablecoin demand. While the US market lags, other regions have seen substantial growth in stablecoin demand. According to the Federal Reserve of the United States, over $1 trillion in banknotes were taken outside the country by the end of 2022.

Threats to US Interests

One factor contributing to the US lagging in stablecoin adoption is the unpredictable administration of these assets. Chainalysis notes that financial centers in Europe and the UAE attract more stablecoin projects due to the lack of transparent US laws. A fintech company spokesperson says this poses a threat to US interests.

As global demand for stablecoins increases, the US faces challenges in regulation and adoption of these assets. Lawmakers feel pressured to act to improve the legal framework.