In a recent post on X (formerly Twitter), CryptoQuant CEO Ki Young Ju warned that “dark stablecoins are likely to emerge in the future.” He attributed his prediction to the shift from hands-off regulation to bank-style oversight.
Why Dark Stablecoins?
Ju argued that anti-censorship users will seek alternatives outside traditional frameworks as governments regulate fiat-pegged tokens. The CEO believes dark stablecoins, designed to be decentralized and free from regulatory oversight, will be the solution for such users.
While stablecoins have long bridged crypto networks and traditional finance, new legislation in major jurisdictions will erode the censorship resistance that attracted users. Emphasizing this, he contrasted Bitcoin’s design with the centralized nature of the tokens issued by firms such as Tether and Circle.
However, he classified dark stablecoins into two categories. The first consists of algorithmic, decentralized pegs that maintain a fiat-equivalent value through supply-adjustment protocols and oracle feeds. These two groups eliminate reliance on fiat reserves held in regulated banks.
The second involves issuances from nations that reject global sanctions and anti-money laundering (AML) mandates. He believes dark stablecoins will preserve transaction privacy and resistance to seizure. The CEO further noted that USDT could be a dark stablecoin if its issuing firm, Tether, does not comply with U.S. regulations.
Stablecoins Face Regulatory Pressures
In the United States, lawmakers are drafting comprehensive bills that would impose capital requirements and enforce AML checks. The European Union’s Markets in Crypto-Assets (MiCA) regulation, effective since June 2024, already mandates governance frameworks for issuers.
As regulators implement these measures, transfers of regulated tokens could require KYC paperwork at nearly every step, while holdings risk confiscation by the government. The development could limit the appeal for users prioritizing uncensored transactions.
Interestingly, the market capitalization of U.S. dollar-denominated stablecoins surpassed $230 billion in early 2025, representing a 54 percent increase year over year. Meanwhile, the combined transaction volumes eclipsed $27.6 trillion.
Meanwhile, privacy-focused crypto-assets such as Monero and Zcash already demonstrate on-chain anonymity by obscuring senders, recipients, and amounts on public ledgers. Also, given TerraUSD’s collapse in 2022, users are still not very confident in trying algorithmic stablecoins.
