Coinbase, the largest US crypto exchange, has sounded the alarm over a significant decline in crypto talent in the US, despite growing corporate interest in the sector. The warning comes as regulatory uncertainty continues to plague the industry, with many experts fearing that a lack of clear guidelines will drive innovation and investment overseas.

The number of US-based crypto developers has fallen by 14 points over the past five years, with only 26% of developers currently based in the US. This decline has led to a shortage of skilled talent, with many top executives citing this as a major obstacle to crypto adoption.

Despite this decline, there has been a significant increase in on-chain projects, with the number of Web3 initiatives by Fortune 100 companies increasing by 39%. Additionally, 56% of Fortune 500 executives reported that their companies are working on on-chain projects, such as consumer-facing payment applications.

The report highlights the need for regulatory clarity to retain crypto developers and talent within the US. Industry leaders are calling for clear guidelines to foster innovation and attract and retain talent in the sector. Without this clarity, many fear that the US will lose its competitive edge in the global crypto market.

Coinbase's report also highlights the efforts of payment companies, such as PayPal and Stripe, to make crypto and stablecoins more accessible. For example, merchants using Stripe can now accept USDC payments, which are automatically converted to fiat. PayPal also supports transaction-free cross-border transfers across 160 countries, compared to the global standard of 4.45% to 6.39% in average charges in the international remittance market.

The report notes that 48% of Fortune 500 executives believe that crypto can increase access to financial systems, particularly for the underbanked and unbanked. However, this can only be achieved if the US takes leadership in the crypto space. Senator Cynthia Lummis has also voiced concerns over the strict stance of the Biden administration and Gary Gensler on Bitcoin and digital assets, warning that this approach may lead the industry to move overseas and impact America's leadership in financial innovation.

Overall, Coinbase's report highlights the need for regulatory clarity and talent retention in the US crypto sector. Without clear guidelines and a robust talent pool, the US risks losing its competitive edge in the global crypto market.