How stablecoins work in betting & the rules that now apply

Why betting uses stablecoins

The EU markets regulator describes two categories of crypto token, asset-referenced tokens & e-money tokens, as “also known as stablecoins”.

Curaçao’s gambling regulator has set out a stablecoin preference in its rules: its crypto guideline for licensed online operators says fiat-backed stablecoins, meaning tokens backed by ordinary currency, are preferred.

Prediction markets lean on stablecoins too. Polymarket uses a token backed 1:1 by USDC as the collateral behind its trades, as covered below.

USDT vs USDC: issuers & freezes

USDT is issued by Tether. The sources describe Tether acting on tokens held at specific blockchain addresses; they do not say whether Circle can do the same with USDC.

The clearest example in the sources is a freeze.

Blockchain security firm PeckShield said the two wallets were blacklisted on 23 April 2026, meaning the tokens at those addresses were blocked from moving. One held about $213 million in USDT & the other roughly $131 million.

Tether said the action was taken in coordination with the Office of Foreign Assets Control (OFAC) & US law enforcement. It did not identify the underlying case. “USDT is not a safe haven for illicit activity,” chief executive Paolo Ardoino said in the company’s statement.

The Block calls it reportedly the largest freeze by size. Tether said it has frozen more than $4.4 billion in assets overall, including more than $2.1 billion tied to US authorities, & works with more than 340 law enforcement agencies across 65 countries.

Earlier freezes include about $225 million in November 2023, linked to a Southeast Asia human-trafficking & “pig butchering” investigation, & roughly $182 million across five Tron wallets in January 2026.

For a player or operator, the practical point is that USDT held at an address the issuer blacklists can stop moving. The sources do not explain how, or whether, holders affected by a freeze can recover their funds.

US rules: the GENIUS Act

According to the White House, the President signed S. 1582, the “Guiding and Establishing National Innovation for U.S. Stablecoins Act” or “GENIUS Act”, into law on Friday 18 July 2025.

The White House notice describes the law as providing “for the regulation of payment stablecoins, and for other purposes”. The notice does not mention gambling. Readers should not take the Act as changing the legal status of betting in any US state; the source says nothing on that point either way.

Europe: MiCA & non-compliant stablecoins

The European Securities & Markets Authority (ESMA), the EU regulator & supervisor, has published an opinion on stablecoins that do not comply with the requirements of the Markets in Crypto-Assets Regulation (MiCA).

ESMA says crypto-asset service providers (CASPs), the firms authorised under MiCA to offer crypto services, should stop providing services related to non-MiCA-compliant stablecoins to clients in the EU. That covers the full range of MiCA services, including trading platforms, exchange, transfers & custody.

National regulators are asked to make sure firms neither keep, introduce nor give clients access to such tokens, & to require controls that stop clients buying more or increasing their exposure.

Where existing exposures remain, ESMA says national regulators should require them to be fixed as soon as possible & no later than three months after the opinion’s publication. Any continuing service should be limited to winding down, such as conversion, withdrawal or transfer, & kept time-limited & closely supervised.

The opinion addresses MiCA-authorised crypto firms. ESMA’s text does not refer to gambling operators.

Prediction markets run on stablecoins

Polymarket announced what it called its “biggest change to date”, Unchained reports: a native stablecoin & a rebuilt trading engine.

The new token, Polymarket USD, is a collateral token backed 1:1 by Circle’s USDC. It replaces the USDC.e bridged token that the platform had been using on the Polygon network.

According to the report, moving away from a bridged asset gives Polymarket more flexibility, including the potential to earn yield on collateral deposits. For most users the website handles the token conversion automatically, while traders running bots need to update their software.

All existing order books were set to be cleared during the switch, with traders given at least a few days’ notice before open orders were cancelled.

Offshore operators: Curaçao’s crypto guideline

The Curaçao Gaming Authority (CGA) has issued a crypto policy guideline for holders of its business-to-consumer online gambling licences, iGaming Business reports. It took effect in June 2026 & applies to all group entities involved in crypto transactions.

Licensees may accept crypto only for gambling, not act as exchanges or custodians. They must screen wallets, score their risk & monitor transactions at deposit & withdrawal, using blockchain analytics.

Player, operational & treasury wallets must be kept separate, & wallets linked to individuals who own or control the operator are banned. Funds linked to mixers or to sanctioned addresses are prohibited outright.

The timeline runs in stages: a compliant crypto policy within three months, risk assessments & staff training within six months, & full compliance by June 2027. That includes wallet segregation, analytics, transaction reconciliation & audit-ready records.

The guideline includes the Travel Rule; iGaming Business says its inclusion reflects standards urged by the Financial Action Task Force (FATF). The CGA can demand faster compliance if significant risks emerge.

What it means for players & operators

For players, the sources point to one concrete risk: an issuer can freeze tokens at a flagged address, as Tether did on Tron on 23 April 2026.

Firms serving EU clients under MiCA face ESMA’s three-month remediation window.

On legality, none of these sources makes betting with stablecoins legal anywhere. The GENIUS Act regulates payment stablecoins in the US, MiCA covers crypto services in the EU, & Curaçao’s guideline binds its own licensees. Whether a given site is lawful depends on the rules where the player is.

Questions

Can Tether freeze my USDT?

Tether can blacklist addresses, & it said it supported freezing more than $344 million in USDT across two Tron addresses flagged by US authorities. Blockchain security firm PeckShield said the wallets were blacklisted on 23 April 2026; Tether did not say when the wallets were first flagged. Tether says it has frozen more than $4.4 billion in assets overall.

Does the GENIUS Act legalise crypto gambling in the US?

The White House describes the GENIUS Act, signed on 18 July 2025, as providing for the regulation of payment stablecoins. Its notice does not mention gambling.

What does ESMA’s MiCA opinion require?

ESMA says MiCA-authorised crypto firms should stop providing services related to non-MiCA-compliant stablecoins to EU clients. Remaining exposures should be fixed no later than three months after the opinion’s publication.

What stablecoin does Polymarket use?

Polymarket announced Polymarket USD, a collateral token backed 1:1 by Circle’s USDC, to replace the bridged USDC.e it had used on Polygon.

When must Curaçao-licensed operators comply with the crypto guideline?

The guideline took effect in June 2026, with full compliance, including wallet segregation & blockchain analytics, expected by June 2027.

Sources

• whitehouse.gov
• esma.europa.eu
• igamingbusiness.com
• unchainedcrypto.com
• help.kalshi.com
• theblock.co
• theblock.co

Sources checked 11 October 2026. Information only. 18+.