CMC News

US Treasury Proposes AML and Sanctions Rules for Stablecoin Issuers

The U.S. Treasury Department released a joint rule proposal on Wednesday requiring payment stablecoin issuers to implement Anti-Money Laundering and sanctions compliance programs. The proposal came from the Financial Crimes Enforcement Network and the Office of Foreign Assets Control (OFAC) as part of the implementation of the GENIUS Act, signed into law by President Donald Trump last July. #Stablecoins #Regulation

Under the proposal, permitted payment stablecoin issuers would need to build and maintain programs addressing both money laundering and the financing of terrorism. They would also be required to establish a #sanctions compliance framework with risk-based internal controls. Issuers would gain the authority to "block, freeze, and reject" certain transactions, and would be classified as financial institutions under the Bank Secrecy Act.

Treasury Secretary Scott Bessent said the rule is designed to protect the U.S. financial system from national #security threats without restricting American companies operating in the stablecoin payments sector. FinCEN said it would not pursue enforcement action against an issuer unless there was a significant or systemic failure to maintain a compliance program.

The #GENIUSAct defines permitted payment stablecoin issuers as entities that are either subsidiaries of insured depository institutions or have received authorization from a federal or state regulator. OFAC said issuers would be subject to regular auditing and testing of their sanctions programs. Comments on the proposal are due within 60 days of publication.