The UK's financial authority has published an official warning to users that Poloniex is not operating under regulation.
The United States government could be facing challenges in maintaining regulatory oversight of the stablecoin market.
With increasing concerns about consumer protection and financial stability, according to a report by blockchain research firm Chainalysis. The report highlights a significant move in stablecoin activity, with users trading assets away from entities licensed in the United States.
From June 2023, more than 50% of stablecoin movement to the top 50 cryptocurrency services was directed to exchanges outside of US licensing. Chainalysis’s findings could point to a shift in the US government’s capacity to oversee and regulate the stablecoin industry. The reduced oversight leaves consumers with limited options to trade, buy and sell stablecoins in a regulated market in the country.
The United States stablecoin transaction volume
The report also notes that the market in North America has emerged as the largest cryptocurrency market, with an estimated $1.2 trillion received between July 2022 and June 2023. This comes despite a shift in movement as users lean towards exchanges outside of the country. The substantial transaction volume made up a major part of the industry’s market share, accounting for 24.4% of the global transaction volume during the period. This is more than the combined transaction volume of Central, Northern, and Western Europe, which stood at an estimated $1 trillion.
The findings suggest that the stablecoin market’s growth in North America is increasing more rapidly than regulatory efforts. While there’s positive trading and transaction volume, it could potentially expose consumers and the broader financial system to risks associated with unregulated stablecoins.
As it stands, there has been no comprehensive regulatory framework to govern stablecoins in the United States. Currently, Congress is considering various bills, such as the Clarity for Payment Stablecoins Act and the Responsible Financial Innovation Act, but the action of executing the bills has been delayed, leaving consumers without the protection of regulation.