The emergence of “dark stablecoins” has been predicted by CryptoQuant CEO Ki Young Ju, as regulatory pressures on digital currencies are expected to intensify.
The potential necessity of censorship-resistant stablecoins was highlighted by Ju in a recent social media post, as greater regulatory scrutiny is being directed toward traditional stablecoin issuers.
As stated by Ju, although Bitcoin was originally developed by the cypherpunk community to resist censorship, stablecoins are presently required to be managed through centralized entities in order to connect digital assets with traditional financial systems.
Chinese Miners Rely on Stablecoins from Tether and Circle
It was pointed out by the CryptoQuant executive that stablecoins issued by entities such as Tether and Circle had functioned with limited governmental oversight up to this point. According to Ju, these assets had provided a financial refuge for multiple groups, including miners based in China.
Ju observed that stablecoins had largely remained free from government intervention, aside from actions targeting money laundering. He projected that state-backed stablecoins would likely be subjected to regulatory frameworks similar to those applied to conventional banking systems. This could include the enforcement of automatic tax deductions via smart contracts and the implementation of wallet freezing mechanisms in accordance with official directives.
Such developments could prompt users who depend on stablecoins for significant cross-border transactions to seek out censorship-resistant alternatives. Ju outlined two possible approaches:
- Algorithmic stablecoins, which are not subjected to governmental control, may be adopted.
- Stablecoins originating from nations that do not impose restrictions on financial transactions could be favored.
A potential technical method could involve decentralized stablecoins that mirror the value of regulated assets like USD Coin through the use of oracle networks such as Chainlink. However, it was noted by Ju that no projects have yet been observed to have effectively executed this model.
It was suggested by Ju that USDT might evolve into a dark stablecoin if its issuing company chooses not to adhere to U.S. regulations imposed by future administrations. The CryptoQuant CEO further indicated that such dark assets could offer potential investment prospects within digital capital markets.
