The US Treasury on Wednesday released a joint proposed rule from the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) that would put meat on the bones of the GENIUS Act, the federal law establishing a regulatory framework for stablecoins.
Stablecoin Issuers To Follow Bank Secrecy Act RulesThe GENIUS Act directs that PPSIs be treated as financial institutions under the Bank Secrecy Act (BSA) and be subject to the full range of federal rules that apply to US financial firms.
In essence, the draft rule sets out how stablecoin issuers must detect, report, and block unlawful activity while maintaining the tools needed to comply with lawful orders.
Issuers are also mandated to adhere to recordkeeping and reporting rules, furnishing OFAC with certifications submitted to their primary federal or state payment stablecoin regulator to confirm the presence of a robust sanctions program.
Payment stablecoin issuers must also possess the capacity to act swiftly in compliance with lawful orders and maintain effective sanctions compliance programs in accordance with OFAC standards.
Compliance Under The GENIUS ActIf finalized, the GENIUS Act rule would mark a significant step toward integrating payment stablecoins into the US regulatory regime for financial institutions. Treasury Secretary Scott Bessent said on the matter:
President Trump is strengthening American leadership in digital financial technology. This proposal will protect the US financial system from national security threats without hindering American companies’ ability to forge ahead in the payment stablecoin ecosystem.
Featured image from OpenArt, chart from TradingView.com
