Regulatory Bypass and Look-Through Governance of Cross-Border U.S. Dollar Stablecoin Flows: A Fiat On- and Off-Ramp Approach

Abstract

Dollar stablecoins can transfer value across borders while detaching account-based identity and reporting data from the blockchain leg. Focusing on privately issued, fiat-backed dollar stablecoins that reach a China-facing fiat interface, this article defines regulatory bypass as a break in information continuity across the account-address-account sequence. The ledger can reveal a transaction path, and prohibition supplies the legal boundary, but intervention still requires proof of customer identity, wallet control, transaction purpose and conversion function. International standards assign duties by function and preserve originator, beneficiary, custody and transaction data across regulated segments, but gaps persist at self-hosted wallets, offshore providers and in the evidentiary use of blockchain analytics. The proposed framework allocates duties according to transaction control and information access. Banks and payment institutions investigate identifiable fiat links; converters and facilitators answer for the functions they perform; platforms, custodians and issuers preserve records within their control through lawful cross-border channels. A reviewable interface record should connect account data, wallet-control evidence, transaction hashes, conversion terms and corroborating off-chain material. Risk signals may trigger inquiry, but restrictions, freezing, liability or referral require progressively stronger corroboration and legally authorised procedures. This reconstructs regulatory continuity without treating technical traceability as proof by itself.