Illicit use of stablecoin is now at its highest level following the mainstream adoption of the asset class by multiple organizations. Last year, over $141 billion in illegal payments were facilitated through stablecoins, while a minority used other financial instruments.
According to TRM Labs, sanction evasion tops the list of illicit stablecoin use over the years. About 86% of flows were attributed to this category in 2025. This is largely due to the nature of the assets and their balance, unlike other crypto assets such as Bitcoin (BTC) and Ethereum (ETH).
Data shows more transactions linked to A7A5 token, a ruble-pegged stablecoin, as Russia moves to avert sanctions. Wallets, including Russian exchanges like Garantax, under this area, are designated by OFAC. Deeper research reveals that, within networks, A7A5 and USDT serve as internal settlement rails to reconcile multiple activities.
Basically, the shift from isolated operations has pushed their popularity in cross-border transactions. Flexible payments were a major argument for stablecoin adoption across markets. Last year, several institutions rolled out stablecoin payments as adoption tripled.
Although most major reforms were fostered by legal and regulated networks, illicit operations capitalized on to evade scrutiny. To avoid banking restrictions, stablecoins became a go-to option. Meanwhile, bad actors also deployed stablecoins in online scams and other activities.
Per the report, funding illicit goods and human trafficking was almost fully facilitated by stablecoins. Meanwhile, over 75% of scam/investment fraud involved stablecoins. For crypto hacks and drains, other digital assets are preferred before stablecoins are used at the end of the laundering process.
“The finding that illicit financial services rely on stablecoins is consistent with TRM’s prior research on guarantee services, which also heavily prioritize stablecoins for transactions. Activity tied to these entities expanded rapidly from 2022 through mid-2025, rising from well under USD 1 billion per quarter to peaks above USD 17 billion, before a sharp decline in late 2025,” TRM wrote.
Despite stablecoin use in illicit activities, it remains integral to the crypto ecosystem and wider financial market. Given the importance of financial infrastructure, governments have issued several regulations under heightened scrutiny.
Last year, the integration of stablecoins and traditional finance became more evident. Corporations like Walmart and Amazon explored options while Circle’s USDC and other assets bagged new approvals. A major argument for these assets is the bridge they offer to banked regions.
