Stablecoins, which promise faster, cheaper, better transactions while maintaining the stability of a pegged asset, typically the US dollar, have been hailed as a crucial link between the crypto world and traditional finance. However, they face a significant surveillance risk, particularly when they integrate with traditional Anti-Money Laundering (AML) and Know Your Customer (KYC) compliance systems. Major banks are also considering issuing their own stablecoins, complicating AML compliance. The author suggests that a “civil liberties-compatible” system should ensure regulatory compliance while protecting user’s right to transactional privacy and financial freedom. The solution lies in creating a binary transaction logic that aligns with the correct regulatory rules at the protocol level. Stablecoins represent an incredible opportunity to fix a broken financial system, but only if they align with the global framework.