Dark Stablecoins to Emerge in The Future, Says CryptoQuant Founder

As the crypto ecosystem evolves, new kinds of assets are bound to emerge. One is dark stablecoins, as postulated by Ki Young Ju, the founder and CEO of the market analytics platform CryptoQuant.

In an X post, Ju explained that dark stablecoins will likely emerge to combat censorship and strict government regulations as crypto users look for new ways to make large international transfers.

The Emergence of Dark Stablecoins

According to the CryptoQuant founder, the cypherpunk community created Bitcoin to be censorship-resistant, impossible to control, and belonging to no one. These features have contributed significantly to the success of the leading cryptocurrency since its inception.

Despite Bitcoin’s resistance to censorship, the asset needs a bridge connecting it to the real world. That is where stablecoins come in. Ju noted that these coins need to be managed by an individual or entity—stablecoin issuers like Tether and Circle have played these managerial roles, holding cash reserves in banks.

Although governments have not really interfered with stablecoins (except in money laundering cases), the assets have become useful as a store of value for various trader groups, including Chinese miners. However, governments are becoming increasingly involved with stablecoin activities, enforcing strict regulation on assets operating within their jurisdictions.

Defying Government Regulations

Last month, the United States House Financial Committee passed the Securing Transparency and Assuring Lawful Banking (STABLE) Act for digital assets pegged to the U.S. dollar. In October 2024, the crypto exchange Coinbase announced it would delist stablecoins not compliant with the Markets in Crypto Assets (MiCA) framework from its European Economic Area (EEA) platform.

With how things are going, Ju believes U.S. dollar-pegged asset transfers may soon automatically trigger tax collection through smart contracts, and governments could freeze wallets or require paperwork for certain activities.

As more crypto users seek censorship-resistant dark stablecoins, developers could create the assets in two ways. The first could be algorithmic stablecoins that governments do not control, while the second could be those issued by countries that do not censor financial transactions.

Ju’s explanation suggests that one example could be a decentralized stablecoin that uses data oracles to stick to the prices of regulated assets like USD Coin (USDC).

Meanwhile, the CryptoQuant founder believes Tether (USDT) could become a dark stablecoin if Tether chooses to defy U.S. government regulations. Until then, Ju thinks dark stablecoin-related assets could have investment potential in internet capital markets.

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