If authorities tighten control over stable cryptocurrencies, there may be demand in the market for similar tokens that are not subject to government censorship.
Tighter government regulation could trigger the emergence of a black market for stablecoins, according to Ki Young Ju, CEO of blockchain analytics platform CryptoQuant. In his opinion, the authorities' desire to control the use of stablecoins will lead users to seek alternatives that are not subject to censorship.
Stablecoins serve as a bridge between the digital and real worlds, and until recently, governments, with the exception of cases involving money laundering, did not interfere with stablecoins, Ki writes. According to him, this made such tokens a safe way to store assets for various groups, such as Chinese miners.
“But that is changing. Soon, any stablecoin issued by a country could face strict government regulation, similar to that of traditional banks. Automatic tax collection via smart contracts, wallet freezes, or documentation requirements based on government rules could be introduced. People who have used stablecoins for large international transfers may start looking for censorship-resistant shadow stablecoins instead,” Ki writes.
He noted that there are two ways to create “black” stablecoins. These are either algorithmic tokens that are not controlled by governments, or stablecoins issued in countries that do not censor financial transactions.
Ki believes that one possible example could be a decentralized stablecoin whose rate would be pegged to the price of regulated tokens, such as USDC, via oracles such as Chainlink. The analyst added that he does not yet know of any such projects, but mentioned Chainlink CEO Sergey Nazarov in a comment under the post, drawing his attention to the idea.
“I'm not sure if there are still long-term investors in cryptocurrency, but I think assets linked to dark stablecoins may have investment potential in internet capital markets. DYOR,” Ki concluded.
US President Donald Trump is actively promoting the development of the market and regulation of dollar-pegged stablecoins. At the end of January, his first executive order after his inauguration was a document entitled “Strengthening America's Leadership in Digital Finance,” which highlighted stablecoins as a key point.
At the same time, in early May, a number of Democratic senators in the US did not support the stablecoin bill (GENIUS Act) during a key vote, which stalled the document's adoption. Senators argue that the bill still needs to be refined.
The industry believes that the halt in the adoption of GENIUS could have further negative consequences for other cryptocurrency bills. Matt Hogan, head of the large management company Bitwise, said that if the US Congress does not pass at least one of the cryptocurrency bills, the industry could face a “difficult summer.” #NewsTrade
