FinCEN and OFAC jointly proposed rules that would treat permitted stablecoin issuers as financial institutions under the Bank Secrecy Act for the first time, imposing anti-money laundering programmes, suspicious activity reporting, and sanctions compliance obligations.
The US Treasury Department on Tuesday proposed sweeping anti-money laundering and sanctions rules for stablecoin issuers, marking the first time the federal government has sought to bring the $180 billion stablecoin market under the same regulatory architecture that governs banks and money transmitters.
The joint proposed rule — issued by the Financial Crimes Enforcement Network and the Office of Foreign Assets Control — implements provisions of the GENIUS Act, which President Trump signed into law in July 2025. It would classify permitted payment stablecoin issuers as financial institutions under the Bank Secrecy Act, subjecting them to a compliance regime that includes customer identification programmes, customer due diligence, suspicious activity reporting, and mandatory sanctions screening at every stage of the stablecoin lifecycle.
Treasury Secretary Scott Bessent framed the proposal as a balance between security and innovation. "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," he said in a statement accompanying the release.
The OFAC component is particularly prescriptive. Issuers must deploy technical controls capable of blocking, freezing, and rejecting transactions that violate US sanctions — and must build compliance programmes around five explicit pillars: senior management commitment, risk assessment, internal controls, testing, and training. The language mirrors OFAC's existing framework for banks but adapts it to the operational realities of blockchain-based payment rails, where transactions settle in seconds rather than days.
For companies like Circle and Tether — the two dominant stablecoin issuers, controlling USDC and USDT respectively — the proposal crystallises obligations that have been theoretically anticipated since the GENIUS Act became law. Circle, which has long positioned itself as the compliance-forward issuer and filed for a New York Stock Exchange listing, is likely better prepared than most. Tether, headquartered outside the US, faces a more complicated path; the GENIUS Act's requirements apply to any issuer whose stablecoins circulate within the American financial system, regardless of where the company is domiciled.
The rule arrives alongside a separate rulemaking from the OCC — published on 3 April — that establishes reserve, capital, audit, and redemption standards for bank-issued stablecoins. Together, the two proposals form a regulatory pincer: the OCC governs how stablecoins are backed and redeemed, while FinCEN and OFAC govern who can use them and under what conditions.
FinCEN emphasised that the obligations are "fit for purpose," scaled to reflect the size and operational complexity of each issuer. That concession is important for smaller issuers, which lobbied heavily during the GENIUS Act's legislative journey for a regulatory framework that wouldn't crush them under compliance costs designed for trillion-dollar banks. Whether the final rules live up to that promise will depend on the details that emerge during the public comment period — expected to run for 60 days following publication in the Federal Register.
The statutory deadline leaves little room for delay. The GENIUS Act requires final implementing regulations by 18 July 2026, with full enforcement beginning no later than 18 January 2027. Issuers that fail to meet the requirements by then face the prospect of being designated as unregistered money transmitters — a classification that carries severe federal penalties.
The Clarity Act, which stalled in the Senate last week, would have addressed the securities classification of crypto assets, but the Treasury's AML proposal moves forward regardless of that legislation's fate. Stablecoin issuers now have their compliance roadmap; the question is whether the industry can build the infrastructure to meet it in nine months.
