Elliptic, a blockchain analytics firm, has launched a new Stablecoin Issuer Due Diligence tool aimed at stablecoin issuers, banks and other financial firms worldwide. The product arrives as stablecoin flows have surged in recent months.
It is meant to help because criminals often prefer stablecoins to avoid currency risk when moving large sums. The tool inspects wallets and traces funds as they hop between blockchains, giving institutions a live view of where risk is growing.
Why stablecoins attract illicit flows?
Stablecoins like USDT and USDC are tied 1:1 to the U.S. dollar which makes them less volatile than other cryptocurrencies. For many criminals, that matters, and they want to avoid price swings as they shift big amounts.
James Smith, founder of Elliptic, says that makes dollar-pegged tokens attractive even though issuers can freeze them. Criminals try to move funds fast and into tokens that are hard to stop, and that behaviour pushes the need for better monitoring tools.
Size of the market
Billions of dollars in stablecoins trade hands every day, as in CoinGecko data shows $94 billion moved in the past 24 hours. The total industry nears $300 billion, and Tether leads with $168 billion in tokens in circulation, more than double the next issuer.
These sums mean any weak link can move large amounts fast. That creates pressure on banks and regulators to keep tabs on flows.
A tool built for banks and issuers
Elliptic designed the new app with banks in mind, and it looks at wallets and tracks assets as they hop from one blockchain to another. The product is not a specialist investigator’s toolkit, and instead it offers a configurable dashboard that can fit into a bank’s normal workflow.
Users can see custom clusters and dynamic historical views to spot how risk changes over time. Elliptic says the tool is easier to use and less static than older analytics systems.
Also Read: Crypto Flows Into Iran Fall Amid War Conflict, Hacks And Stablecoin Freeze
Who can use it?
Elliptic says the tool can be applied to any stablecoin issuer, and that includes top names like Tether and Circle and their main partners and distributors. A number of large banks that work with issuers already use the product, Smith said, though he would not name them.
The app aims to help financial institutions meet today’s rules and to adapt as regulation evolves.
Regional and chain trends
Not all networks or regions see the same level of illicit activity. Smith pointed to China and Southeast Asia as key regions.
He also noted that USDT on Tron is especially popular in those areas, and Tron holds more than $78 billion of USDT, while Ethereum hosts about $85 billion, according to Tether data. Those concentration points shape where investigators and banks focus their monitoring.
Freezing powers and limits
Stablecoin issuers can often freeze or blacklist wallet addresses, and the smart contracts behind many tokens let issuers revoke approvals, burn tokens or block transfers.
That kind of control helped T3, a joint unit of Tron, Tether and TRM Labs, to freeze more than $250 million of criminal assets in under a year.
Even so, Elliptic’s investigators say illicit actors sometimes shift funds into non-freezable tokens or native chain assets early in the laundering process to avoid disruption.
How this tool differs?
Elliptic argues its Issuer Due Diligence app stands out by being configurable and by offering ongoing snapshots of risk. It is designed to plug into a bank’s existing systems.
That makes it faster to use for compliance teams that need clear signals without heavy investigative work. The firm says that focus on usability and privacy helps financial firms adopt the tool more broadly.
Banks that want to serve stablecoin issuers must balance opportunity with risk. Stablecoins create a new line of business for banks.
Also Read: Stripe And Paradigm Reveal Tempo, A Blockchain For High-Speed Stablecoin Payments
