As crypto markets kicked off 2026, one trend became increasingly apparent: 2025 was less about speculation and more about infrastructure, regulation, and real-world adoption. Across jurisdictions, regulators and institutions shifted from theory to implementation, reshaping how digital assets are supervised and utilized.
A central feature of this transformation was the rise of stablecoins. While Bitcoin still dominates overall market capitalization, stablecoins now account for over half of all onchain transaction volumes globally. Their growing use in payments, remittances, and trading has put them squarely in the regulatory spotlight, as governments weigh financial stability and compliance risks.
In this week’s episode of Byte-Sized Insight, Cointelegraph examines how these developments unfolded, featuring insights from Matthias Bauer-Langgartner, Head of Policy for Europe at Chainalysis.
Stablecoins take center stage
“2025 has been a year of stablecoins,” Bauer-Langgartner said, noting that their dominance is not new but has been steadily increasing over the years. Chainalysis data shows that stablecoins now account for more than 50% of transactional volumes, even as Bitcoin continues to represent roughly half of total market capitalization.
This expansion has made stablecoins highly attractive for legitimate financial applications — but also for illicit activity, highlighting the dual regulatory challenges they pose.
Stablecoins take center stage
“2025 has been a year of stablecoins,” Bauer-Langgartner said, emphasizing that their rise is part of a longer-term trend rather than a sudden shift.
Chainalysis data shows that stablecoins now account for over 50% of onchain transaction volumes, even as Bitcoin continues to hold roughly half of total market capitalization.
This growing adoption has made stablecoins increasingly useful for legitimate financial activities, while also creating opportunities for illicit use, underscoring the regulatory challenges they present.
“Stablecoins have [also] been dominating the crypto assets transactional volumes already for quite a while now, both in illicit usage and also in legitimate usage.”
He noted that criminals often favor stablecoins because they are highly liquid, globally accessible, and shielded from extreme volatility. Yet, that same structure also gives regulators and law enforcement leverage.
“Centralized stablecoin issuers generally have the ability to freeze or even burn tokens,” he explained, describing it as “an extremely powerful tool to combat financial crime.”
Crypto crime goes geopolitical
Beyond individual hacks and scams, 2025 also saw a notable rise in state-linked crypto activity.
“Last year was, in many instances, a record year for crypto crime,” Bauer-Langgartner said. Chainalysis data shows $154 billion in illicit crypto flows, a 162% increase year-over-year, with much of that surge attributed to nation-state actors.
“Nation-state actors are facilitating crypto usage for illicit activity on a really professional level.”
In the episode, Bauer-Langgartner also examined specific sanctioned stablecoins and state-backed networks used to evade restrictions.
Despite the rise in illicit activity, he emphasized that it still accounts for only a small fraction of overall crypto usage. “Even with the increase we’ve seen, it’s still under 1% of total activity,” he noted, highlighting the challenge regulators face as adoption continues to accelerate.
He also discussed Europe’s ongoing rollout of the Markets in Crypto-Assets (MiCA) regulation, explaining how it and other emerging global frameworks are helping to create a more structured and compliant crypto ecosystem.
The full episode is available on Cointelegraph’s Podcasts page, as well as on Apple Podcasts and Spotify. Be sure to explore Cointelegraph’s full lineup of shows for more insights.
