The proposal, which came from the Department’s Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC), defines obligations for stablecoin issuers regulated in the U.S., specifically programs, procedures, and technical capabilities.
In many ways, the rules bring stablecoin issuers under the umbrella of other entities that FinCEN and OFAC already regulate, formally classifying them as “financial institutions” under legislation such as the Bank Secrecy Act, which requires financial institutions to assist government agencies in detecting and preventing financial crimes.
The obligations included in the proposal require a stablecoin issuer operating under the GENIUS Act to establish and maintain an anti-money laundering program, report suspicious activity, and maintain an effective sanctions compliance program.
Additionally, the proposal states that stablecoin issuers must offer tokens that allow for transactions to be blocked, frozen, or rejected in the event that they violate the law. It also requires stablecoin issuers to comply with lawful orders.
“President Trump is strengthening American leadership in digital financial technology,” said Treasury Secretary Scott Bessent in a statement. “This proposal will protect the U.S. financial system from national security threats without hindering American companies’ ability to forge ahead in the payment stablecoin ecosystem.”
Under the proposed rule, stablecoin issuers must select an individual who would be responsible for establishing adequate systems for combating money laundering and terrorism financing.
Notably, individuals who aren’t located in the U.S. are precluded, as well as those who have been convicted of offenses such as insider trading, cybercrime, and financial fraud.
Still, when it comes to the enforcement of those programs, FinCEN “generally would not take an enforcement action” against a stablecoin issuer if adequate procedures are already in place, per the proposal, which asks for comments within the next 60 days.
In a statement on Wednesday, Warren Kornfeld, senior vice president at Moody’s Ratings Financial Institutions Group, noted that the FDIC’s proposal wasn’t limited to stablecoins. It would also bring tokenized deposits within the banking sector, he said.
“While its adoption remains uncertain, if enacted, it could establish a layered digital cash ecosystem based on risk and regulatory profiles,” he added.
