TRM Labs Shows Stablecoin Growth Is Strong as Illicit Flows Stay Narrowly Focused

Stablecoins played a prominent role in global financial systems in 2025, with monthly transaction volumes repeatedly exceeding USD 1 trillion. While the majority of these transactions supported legitimate cross-border payments and settlements, a growing portion was used to facilitate illicit activity. Blockchain analytics firm TRM Labs reported that illicit stablecoin flows in 2025 totaled USD 141 billion, marking the highest annual amount in five years.

The majority of illicit stablecoin activity was concentrated in a small number of large-scale networks, with 86% of all illicit crypto flows attributed to sanctions evasion and money laundering. These networks leveraged stablecoins to move value across borders, bypassing traditional financial controls. The A7 network, linked to sanctioned Russian exchanges like Garantex and Grinex, processed at least USD 83 billion in direct volume, according to TRM Labs.

Despite the significant increase in illicit flows, the report emphasizes that misuse remains highly concentrated rather than widespread. Professional facilitators and networked intermediaries were the primary locus of illicit risk, with up to 99% of volume in some cases denominated in stablecoins.

Why Did Illicit Activity Remain Concentrated in Stablecoins?

Stablecoins provide a critical infrastructure for sanctioned actors to move funds quickly and anonymously. Unlike traditional financial systems, stablecoins allow for fast, low-cost transactions that are difficult to trace. This has made them a preferred vehicle for money laundering and sanctions evasion, particularly in networks like the A7 ecosystem.

The report highlights how these networks evolved into sophisticated platforms for illicit activity. The A7 network, for example, adapted to evade detection and became a central hub for large-scale financial crime. These operations often intersect with other state-backed ecosystems, including actors connected to China, Iran, North Korea, and Venezuela.

What Are the Implications for Policymakers and Regulators?

The growing use of stablecoins for illicit activity raises concerns for policymakers, who must balance the benefits of stablecoin adoption with the need to prevent financial crime. In the United States, debates are ongoing about the role of interest-bearing stablecoin accounts, while in China, discussions have resumed about the future of stablecoins.

Regulatory action is seen as essential to curb the operations of concentrated illicit networks. TRM Labs emphasizes the need for targeted enforcement and improved monitoring of stablecoin transactions, particularly for networks operating under the guise of legitimate financial services.

What Are Analysts Monitoring Next?

Analysts are closely watching how jurisdictions respond to the rise of stablecoins in illicit financial infrastructure. The report notes that while the overall use of stablecoins is expanding, the misuse is still concentrated in specific networks. This suggests that targeted enforcement could significantly disrupt illicit flows without stifling the broader adoption of stablecoins.

The performance of guarantee services and front-company exchanges also remains a key focus for analysts. These services, which help move funds for high-volume clients, have seen a dramatic rise in stablecoin activity, from less than USD 1 billion per quarter in 2022 to peaks above USD 17 billion in mid-2025.