Stablecoin compliance can potentially bypass traditional banking's KYC model by leveraging blockchain's transparency and pseudonymity. Decentralized identity solutions, like self-sovereign identity, allow users to control verifiable credentials without centralized oversight. Smart contracts can enforce compliance rules, such as transaction monitoring, while preserving user privacy. On-chain analytics can flag suspicious activity without requiring extensive personal data. However, regulators often demand KYC-like measures to combat money laundering and fraud. Hybrid approaches, combining on-chain verification with minimal off-chain KYC, could balance privacy and compliance. Jurisdictions like Singapore and Switzerland are exploring such frameworks, but global harmonization remains a challenge. Stablecoin issuers must navigate varying regulatory expectations while innovating beyond rigid banking models.