Leveraging Large Language Models to Bridge Cross-Domain Transparency in Stablecoins

TL;DR

This paper presents an LLM-based framework to improve transparency in stablecoins by aligning issuer disclosures with observable circulation data, enabling automated analysis across heterogeneous sources.

Contribution

It introduces a novel LLM-driven approach that integrates multi-source stablecoin data and disclosures within a standardized protocol for enhanced transparency and auditing.

Findings

Identified systematic gaps between reported and observed circulation data.

Demonstrated LLM capability to align and analyze heterogeneous blockchain and disclosure data.

Showed that LLM-assisted analysis improves transparency and supports automated auditing in DeFi.

Abstract

Stablecoins such as USDT and USDC aspire to peg stability by coupling issuance controls with reserve attestations. In practice, however, transparency remains fragmented across heterogeneous data sources, with key evidence about circulation, reserves, and disclosure dispersed across records that are difficult to connect and interpret jointly. We introduce a large language model (LLM)-based automated framework for bridging cross-domain transparency in stablecoins by aligning issuer disclosures with observable circulation evidence. First, we propose an integrative framework using LLMs to parse documents, extract salient financial indicators, and semantically align reported statements with corresponding market and issuance metrics. Second, we integrate multi-chain issuance records and disclosure documents within a model context protocol (MCP) framework that standardizes LLM access to both quantitative market data and qualitative disclosure narratives. This framework enables unified retrieval and contextual alignment across heterogeneous stablecoin information sources and facilitates consistent analysis. Third, we demonstrate the capability of LLMs to operate across heterogeneous data domains in blockchain analytics, quantifying discrepancies between reported and observed circulation and examining their implications for transparency and price dynamics. Our findings reveal systematic gaps between disclosed and verifiable data, showing that LLM-assisted analysis enhances cross-domain transparency and supports automated, data-driven auditing in decentralized finance (DeFi).