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. The draft rule translates the statute’s requirements into concrete anti‑money‑laundering (AML) and sanctions‑compliance obligations for permitted payment stablecoin issuers (PPSIs), bringing the industry closer to clear standards. Stablecoin Issuers To Follow Bank Secrecy Act Rules The 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. Treasury’s proposal follows that instruction, seeking to tailor requirements to the scale of each PPSI while aiming to reduce potential illicit‑finance vulnerabilities and protect national security. 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 would be obliged to establish and maintain anti‑money‑laundering and countering‑the‑financing‑of‑terrorism (CFT) programs. These programs must be structured and documented to align with the core expectations of regulated entities as outlined by OFAC. 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. Additionally, these programs are required to include provisions for reporting suspicious activities and technical capabilities to detect and handle transactions that breach federal or state laws, regulations, or court orders promptly. 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 Act Treasury emphasized that the proposal is meant to be proportionate and adaptable. The GENIUS Act tasks the Secretary of the Treasury with issuing regulations tailored to the size and complexity of PPSIs, and the draft rule reflects that directive by focusing on outcomes and capabilities rather than a one‑size‑fits‑all checklist. If 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
