The emergence of “dark stablecoins” has been predicted by CryptoQuant CEO Ki Young Ju, as regulatory pressures on digital currencies are expected to intensify.
Ju highlighted the potential need for censorship-resistant stablecoins in a recent social media post, as regulators increase scrutiny on traditional stablecoin issuers.
Ju stated that although the cypherpunk community originally developed Bitcoin to resist censorship, stablecoins currently require centralized entities to bridge digital assets with traditional financial systems.
Chinese Miners Rely on Stablecoins from Tether and Circle
The CryptoQuant executive pointed out that entities like Tether and Circle had operated with limited governmental oversight until now. 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 regulators would likely subject state-backed stablecoins to frameworks similar to those used for 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:
- Users may adopt algorithmic stablecoins that operate outside governmental control.
- Users may favor stablecoins issued by nations that do not impose restrictions on financial transactions.
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, Ju noted that no projects have yet effectively executed this model.
Ju suggested 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.
