As crypto markets rolled into 2026, regulators weren’t talking about meme rallies or the next big token launch. They were talking about plumbing. And in 2025, the plumbing that mattered most was stablecoins—dollar- and euro-pegged tokens that now move a huge share of onchain value and increasingly sit at the center of compliance, sanctions enforcement and financial surveillance.
Cointelegraph’s recent breakdown of the year’s “regulatory reality” captures that shift: stablecoins aren’t on the sidelines anymore. The outlet notes that stablecoins now account for more than half of global onchain transaction volume, even as Bitcoin remains the largest asset by market cap.
That scale is exactly why governments are moving from broad principles to hard requirements—covering licensing, disclosures, redemption rights, transaction monitoring and the ability to stop illicit flows.
Stablecoin regulation moves from theory to enforcement
Stablecoins sit in an awkward middle ground: they behave like cash for trading and cross-border payments, but they circulate on networks built for permissionless transfers. That combination has made them attractive for everyday use—and for criminals and sanctioned actors seeking speed and liquidity.
Chainalysis, a major blockchain analytics provider, says illicit cryptocurrency addresses received at least $154 billion in 2025, up 162% year over year, driven largely by a 694% increase in value received by sanctioned entities.
At the same time, Chainalysis stresses that illicit activity is still a small slice of total crypto volume, remaining below 1%on an “attributed transaction volume” basis.
But the composition of illicit flows matters. Chainalysis reports that stablecoins accounted for 84% of all illicit transaction volume—mirroring their broader growth as the market’s preferred medium of exchange.
This is where “surveillance” enters the picture. In Cointelegraph’s summary of Chainalysis commentary, stablecoin issuers’ centralized controls can become a law enforcement lever: issuers may have the ability to freeze (and in some cases burn) tokens, making stablecoins easier to disrupt than many other crypto assets when they touch compliant issuers or exchanges.
Sanctions become the main crypto crime storyline
A key theme in 2025 was the rise of geopolitics-driven crypto crime, where state-linked actors and sanctions evasion tactics began to look less improvised and more industrial. Chainalysis describes nation-states plugging into professionalized onchain service providers—or building their own infrastructure—to move value under sanctions pressure.
One example Chainalysis highlights is Russia’s ruble-backed A7A5 token, which it says processed over $93.3 billion in less than a year after its 2025 launch.
Separately, the Financial Times reported on a ruble-pegged token ecosystem facilitating billions in shadow payments, underscoring how stablecoins can be repurposed into sanctions-resilient rails when traditional cross-border channels tighten.
On the theft side, both Chainalysis and the Financial Action Task Force (FATF) cite a massive Bybit-related incident: FATF’s 2025 targeted update says the DPRK stole $1.46 billion from Bybit and notes very limited recovery—an example used to argue for stronger international coordination and better asset-freeze capabilities.
FATF: stablecoins are now the default illicit instrument
FATF, the global standard-setter for anti-money laundering (AML) rules, has become increasingly direct about stablecoins. In its June 2025 targeted update on virtual assets and VASPs, FATF says the use of stablecoins by illicit actors—ranging from DPRK-linked groups to terrorist financiers and drug traffickers—has continued to increase, and that most onchain illicit activity now involves stablecoins.
FATF also points to uneven implementation of its standards and the Travel Rule (which requires originator/beneficiary information to accompany certain transfers). FATF says 99 jurisdictions have passed or are in the process of passing legislation to implement the Travel Rule, but global rollout remains patchy.
Reuters reported that as of April 2025, only 40 out of 138 assessed jurisdictions were “largely compliant” with FATF’s virtual asset standards—highlighting the enforcement gaps criminals exploit.
Europe’s MiCA turns stablecoins into a regulated product category
In the EU, 2025 was also an implementation year. Europe’s Markets in Crypto-Assets Regulation (MiCA) creates a uniform rulebook for crypto assets not already covered by traditional financial services law, including stablecoin-like categories such as asset-referenced tokens (ARTs) and e-money tokens (EMTs), with obligations around transparency, authorization and supervision.
And regulators are still stress-testing how those rules work in practice. Reuters reported that the European Commission examined how well protections like redemption rights apply when “identical” EMT stablecoins are issued by different entities inside and outside the EU—raising questions about the depth and consistency of the safety net for stablecoin holders.
The US continues to weaponize sanctions tools against crypto rails
On the enforcement front, US authorities have continued using sanctions powers to disrupt networks accused of enabling cybercrime and sanctions evasion. The US Treasury’s public sanctions announcements emphasize that transactions involving blocked persons can expose parties to enforcement risk and reiterate how broadly sanctions restrictions can apply across payment and service chains.
In plain terms: as stablecoins become a mainstream settlement layer, regulators are increasingly treating stablecoin compliance—screening, monitoring, freezing, reporting—not as a crypto niche, but as core financial infrastructure policy.
What to watch in 2026
If 2025 established the new regulatory reality, 2026 is likely to be about tightening the bolts: more audits, sharper licensing standards, more Travel Rule enforcement, and more pressure on stablecoin issuers and exchanges to prove they can police flows at scale. FATF’s warnings and MiCA’s rollout suggest the direction of travel is clear: stablecoins are becoming the most regulated part of crypto precisely because they are the most used.