As governments prepare to tighten control over stablecoins, some users may turn to less regulated, privacy-focused versions instead.
These alternatives, often called “dark stablecoins”, could attract users who want to avoid government tracking or restrictions.
Traditionally, stablecoins have appealed to those who prefer fewer rules. However, lawmakers, especially in the US, are working on stablecoin rules that treat these tokens more like bank-issued money.
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In a May 11 post on X, CryptoQuant CEO Ki Young Ju said that if stablecoins start operating under strict government control, users may be forced to provide documents to move funds or face taxes taken automatically by smart contracts. He added:
People who used stablecoins for big international transfers might start looking for censorship-resistant dark stablecoins instead.
Ju described several ways this type of private coin could exist. One method would be to build a decentralized coin that uses algorithms to manage its value, rather than holding real-world assets like dollars or gold. This kind of coin could follow the price of a regulated stablecoin, like USDC
$0.9888
, by using “data oracles like Chainlink
$17.41
“.
Another option could be stablecoins created by countries that do not place limits on financial transactions. There is also the chance that Tether, which runs the USDT
$0.9875
token, may not follow US rules in the future. Ju said that if this happens, USDT might take on the role of a “dark” stablecoin once again.
Meanwhile, Representative Maxine Waters addressed World Liberty Financial (WLFI), a stablecoin backed by President Donald Trump’s family, during a recent hearing in Washington. What did she say? Read the full story.
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.
