Nonetheless, with the possible implementation of onchain direct scrutiny methods, including tax collection through smart contracts, and freezing of funds based on government rules, this is poised to change, giving rise to dark stablecoins that could satisfy different use cases.
Young Ju explains that dark stablecoins can be programmed in two different ways: using algorithms to maintain the U.S. dollar peg, although most of these stablecoins (including TerraUSD) have failed before; and using stablecoins issued by countries that don’t censor financial transactions.