• Decentralized exchanges (DEXs) saw a major increase in trading volume in March, reaching $133.1 billion–the highest total since May.
• This comes as the crypto industry faces stronger regulatory pressure from U.S. entities such as the SEC and CFTC.
• Contributing to this rise in DEX trading volume could be the stablecoin crisis where USDC lost its peg to the dollar, leading many holders to rely on DEXs for liquidity.
Increased Trading Volume on DEXs
Decentralized exchange (DEX) total trading volume rose to $133.1 billion in March, the third consecutive monthly increase and the highest monthly total since May, according to DefiLlama data. This jump is likely due to increased regulatory pressure from U.S officials such as the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC).
U.S Regulatory Pressure on Crypto Exchanges
The U.S has been cracking down on centralized exchanges such as Kraken, Coinbase and Binance, resulting in some traders opting for more decentralized options like DEXs instead of their traditional centralized counterparts. The SEC issued a Wells Notice to Coinbase while also targeting Kraken’s staking service, while the CFTC accused Binance of evading U.S law altogether – all of which have led some people to speculate that crypto traders will shift towards more decentralized alternatives for exchanging digital assets next time around.
Stablecoin Crisis Prompted Increased Use of DEXs
The stablecoin crisis could also play a role in increasing activity on decentralized exchanges – when USDC lost its peg to the dollar after Silicon Valley Bank collapsed in mid-March, research platform Kaiko reported that CEXs had a lack of liquidity for stablecoin pairs causing an “unprecedented number” of USDC holders relying on DEXs for liquidity instead as a result of this situation unfolding..
Benefits of DEXs
Decentralized exchanges offer greater autonomy over personal finances compared with their centralized counterparts due to its underlying blockchain technology allowing users full control over their funds at all times – no middleman involved which ultimately makes it harder for any attempts at censorship or regulation by external authorities from taking place if used properly by individuals looking for these kinds of benefits..
Overall it appears that increased regulatory pressure from U.S entities along with the recent stability issues surrounding USDC have prompted an uptick in usage of decentralized exchanges lately compared with what was seen during previous months – something that looks set to continue going into April if current trends are anything to go by given how both factors still remain relevant within this space currently..