Stablecoins become a tool for evading economic sanctions, posing challenges for global regulation

Stablecoins are becoming a powerful tool for evading economic sanctions, with criminals using them to launder illicit funds. According to online media reports, The New York Times has revealed related information.

In the past, smugglers and sanctioned individuals used diamonds or artwork to hide assets, but these methods were inconvenient to transport and had limited applications. However, stablecoins, which are pegged to the US dollar, are easy to purchase and can be transferred across borders, making them attractive tools for criminals. According to on-chain analytics reports, illegal transactions conducted via stablecoins in 2024 reached as much as $25 billion. The United States’ powerful economic sanction tools—US dollar and global banking system blockades—are being circumvented.

The US Treasury Department has long blocked illegal financial activities through banks and card companies, but stablecoins bypass intermediaries, evading authorities’ tracking. A former Treasury official and the policy head at blockchain data firm TRM Labs warned, “Criminals can now move millions of dollars with just a few clicks of a mouse,” and that economic sanctions are losing their effectiveness.

A New York Times reporter conducted an experiment to show how easily stablecoins can circumvent sanctions. He put $20 into a crypto ATM and exchanged it for stablecoins, then used a Telegram bot to generate an anonymous virtual card. No ID or address verification was required in the process. The card issuer, “OnePay,” is operated by Russians and provides services to help sanctioned Russians bypass online payment restrictions.

The investigation found that at least 24 companies offer anonymous card services based on stablecoins, with headquarters in Costa Rica, Malta, Georgia, Kazakhstan, Russia, and other countries. The US passed a stablecoin regulatory bill in July 2025, but overseas exchanges and decentralized finance platforms still exist in a regulatory vacuum.

Notably, a major stablecoin issuer has issued more than $180 billion in stablecoins and is headquartered in El Salvador to avoid US regulation. The company holds $112 billion worth of US Treasury bonds, and its investment bank partners’ board includes two sons of the US Secretary of Commerce, sparking political controversy.