The rapid expansion of stablecoins has reshaped cross-border value transfer by enhancing transactional speed, liquidity, and accessibility while raising concerns about illicit financial flows. This article conceptualizes stablecoins as potential criminal infrastructure under fragmented global financial governance, but it clarifies that the relevant risks are not identical to those of generic digital value transfer. The stablecoin-specific mechanism lies in the interaction of three features: relative price stability that supports unit-of-account and settlement functions; issuer and redemption governance that create selective points of control; and hybrid centralized-decentralized circulation that allows value to move across platforms, wallets, and jurisdictions.
Drawing on socio-legal and institutional analysis, the article examines how divergent regulatory approaches, uneven supervisory capacity, and cross-border enforcement delays constrain the operation of existing AML/CFT frameworks. It makes two contributions. Analytically, it explains how stablecoins may acquire infrastructural significance when embedded in illicit financial systems under conditions of regulatory fragmentation. Operationally, it translates this argument into a bank-facing supervisory framework focused on bank-VASP interfaces, FX and cross-border settlement channels, freeze/recall workflows, prudential exposure mapping, and displacement metrics. The article contributes to debates on banking regulation by showing how fragmented governance can enable stablecoin-related risks to persist even when individual firms appear formally compliant.