New Rules Could Push Users Toward Untraceable Stablecoins

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Stricter Rules Could Push Users Toward Privacy-First Stablecoins

Written by Aaron S.,

Editor-In-Chief

Last Updated: May 12, 2025

Key Takeaways

Governments may tighten stablecoin rules, which could lead users to seek out less regulated, privacy-focused "dark stablecoins";
Ki Young Ju warns that stricter oversight could mean tax-triggered transfers and ID checks;
Dark stablecoins might rely on algorithms or be issued by non-compliant regions, and USDT could regain that role if rules are ignored.

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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 USDC $0.9971 , by using "data oracles like Chainlink LINK $17.33 ".

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 USDT $0.9960 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.