US Losing Stablecoin Oversight as Activity Shifts to Unregulated Entities: Chainalysis Report
Summary:
The US government's regulatory grip on the stablecoin market seems to be weakening, as per a report from blockchain research firm Chainalysis. The report notes an increasing shift in stablecoin activity from US licensed services to entities unlicensed in the country. As of June 2023, roughly 55% of stablecoin influxes to the top 50 crypto services were received by unlicensed exchanges. While North America remains the largest crypto market, US consumers are missing out on regulated stablecoin opportunities, and lawmakers are yet to enact specific stablecoin legislations.
Chainalysis, a well-known blockchain research entity, has issued a report indicating a potential decline in the ability of the US government to regulate the stablecoin market. The report highlights a trend wherein a significant portion of stablecoin activity is taking place via institutions that lack US licensure. In the annual North America cryptocurrency report published on October 23rd, Chainalysis presented evidence showing that the major fractions of stablecoin influxes into the top 50 cryptocurrency services have consistently been transferred from licensed US operations to those without US licenses since the spring of 2023. As of June 2023, approximately 55% of stablecoin inflow to the 50 major services was received by exchanges unlicensed in the US, as per the report. According to Chainalysis, the observations indicate that the US government's control over the stablecoin market is progressively diminishing, while US consumers are left with fewer opportunities to interact with regulated stablecoins. "Even though US establishments were initially pivotal in legitimizing the stablecoin market, an increasing number of cryptocurrency users are resorting to unregulated, foreign-based trading services and issuers," Chainalysis observed. Lamentably, US lawmakers have yet to enact legislation specifically governing stablecoins, with bills such as the Clarity for Payment Stablecoins Act and the Responsible Financial Innovation Act still under consideration in Congress. Notwithstanding the reduction in state-regulated stablecoin operations on American soil, North America has managed to secure the position of the largest cryptocurrency market, having taken in an estimated $1.2 trillion between July 2022 and June 2023. North American transactions represented 24.4% of global activity during this period, surpassing the Central, Northern, and Western European region that earned approximately $1 trillion, according to Chainalysis.
Published At
10/24/2023 8:14:13 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.