Stablecoins under scrutiny: what tighter rules mean for traders
22 APRIL 2025: In 2024, the total trading volume of crypto pairs involving stablecoins exceeded $25.8 trillion and stablecoin transfers reached $27.6 trillion – surpassing the combined transaction volumes of Visa and Mastercard by over 7.68%. This highlights their substantial impact on the market that’s attracted intensified regulatory scrutiny, both globally and locally. Stablecoins now face a wave of new rules and traders must prepare for potential shifts in liquidity, trading pairs, and compliance standards.
“Stablecoins have long operated in a regulatory grey area, but we’re now seeing global financial authorities move to clarify rules, increase transparency, and impose more rigorous compliance standards,” says Roger Eskinazi, Managing Partner at Tickmill, South Africa. “For traders, this means staying alert to shifts that could impact liquidity, pricing, and even the structure of trading pairs.”
A shifting regulatory environment
Locally, South Africa is taking decisive steps to bring crypto assets, including stablecoins, under regulatory oversight. Directive 9, issued by the Financial Intelligence Centre, will come into effect on 30 April 2025, mandating that all crypto platforms collect and store identity information for cryptocurrency transactions. This aligns with global anti-money laundering (AML) efforts and is part of South Africa’s broader plan to exit the Financial Action Task Force (FATF) grey list.
“This directive is a signal that the regulatory framework for digital assets in South Africa is maturing,” says Eskinazi. “It also means traders who rely on stablecoins for quick, anonymous transfers will need to reassess how they use these instruments within a compliant structure.”
Globally, the European Union’s Markets in Crypto-Assets (MiCA) regulation came into implementation in December 2024. MiCA introduces a more unified framework for digital assets across EU member states, including specific provisions around the issuance, backing, and reserve requirements for stablecoins. These rules aim to protect consumers, prevent systemic risk, and ensure that stablecoins are fully redeemable.
“The implementation of MiCA has global implications,” adds Eskinazi. “Because many major stablecoins are issued or traded through EU-based platforms, South African traders could see changes in access, liquidity, and the treatment of stablecoin-collateralised positions.”
The impact on trading strategies
For forex and crypto traders, stablecoins offer a bridge between traditional and decentralised markets. Tether (USDT), USD Coin (USDC), and Binance USD (BUSD), among others, have become settlement currencies in many exchanges. Their role in providing liquidity and serving as trading pairs means that tighter regulation could directly affect how efficiently traders can enter or exit positions.
“Regulatory developments might limit the use of certain stablecoins on major exchanges or change how margin requirements are calculated when stablecoins are used as collateral,” Eskinazi explains. “Traders who rely on stablecoins to manage cash positions during high-risk periods may also face restrictions, requiring a reassessment of liquidity strategies and alternative hedging instruments.”
Enter CBDCs: friend or foe?
As central banks accelerate the rollout of Central Bank Digital Currencies (CBDCs), questions have emerged about whether CBDCs will compete with or complement existing stablecoins.
CBDCs differ from decentralised stablecoins in that they are issued and controlled by governments and central banks. The South African Reserve Bank (SARB) continues to explore CBDC integration through Project Khokha, while also testing stablecoin use cases in a regulatory sandbox over the next two years. Globally, projects like China’s digital yuan and the digital euro are catching on, adding another layer of complexity for traders.
“CBDCs offer traders a potentially more secure, state-backed alternative to stablecoins, but with far less anonymity and likely stricter usage controls,” notes Eskinazi. “They may reduce forex volatility in certain corridors by offering direct, central bank-managed settlement options but that’s contingent on widespread adoption and global interoperability.”
Hedging against regulatory uncertainty
Considering these shifts, savvy traders are already adjusting their approach. Eskinazi recommends three key strategies:
- Diversify stablecoin exposure
Rather than relying on a single stablecoin, traders should monitor which coins are backed by regulated entities, undergo regular audits, and demonstrate resilience during stress events.
- Stay platform aware
Not all brokers or exchanges will respond to regulatory changes in the same way. Traders using platforms like Tickmill, which offer access to multiple asset classes in a regulated environment, are better positioned to withstand disruptions in crypto market access or liquidity.
- Integrate stablecoins strategically
Use stablecoins as part of a broader trading strategy not just as digital cash. For example, pairing stablecoins with forex or commodities trading during high-volatility periods can smooth portfolio returns and offer quick rebalancing without the delays of fiat settlement.
“Regulation is the beginning of stablecoins’ maturity. As these instruments become better integrated into the global financial system, traders who adapt early and adopt compliance-first strategies will be in the best position to benefit,” concludes Eskinazi.
Image credit: Freepik
