The U.S. Treasury Department has put forward a proposed rule outlining how stablecoin issuers must structure anti-money laundering and sanctions compliance programs under the GENIUS Act, a federal framework enacted last year. The proposal was issued jointly by the Treasury’s Financial Crimes Enforcement Network and Office of Foreign Assets Control. It specifies the programs, procedures, and technical capabilities that regulated stablecoin issuers are expected to maintain.
A central element of the proposal formally classifies stablecoin issuers as financial institutions under existing legislation, including the Bank Secrecy Act, which obligates financial institutions to assist government agencies in identifying and preventing financial crimes. This classification brings stablecoin issuers in line with other entities already subject to oversight by the two agencies. The move represents a significant expansion of the regulatory perimeter around digital asset companies operating in the United States.
Under the proposed requirements, stablecoin issuers operating within the GENIUS Act framework must establish and sustain anti-money laundering programs, report suspicious activity, and maintain functioning sanctions compliance systems. Issuers are also required to offer tokens with technical capabilities that allow transactions to be blocked, frozen, or rejected when they are found to violate the law. Compliance with lawful government orders is additionally mandated under the proposal.
The Treasury described the proposal as striking a balance between national security protections and support for domestic innovation. Treasury Secretary Scott Bessent stated that the proposal is intended to shield the U.S. financial system from security threats while preserving the ability of American companies to advance in the payment stablecoin space. The department framed the rules as consistent with the broader goal of reinforcing U.S. leadership in digital financial technology.
The proposal also sets conditions for the individual designated to oversee anti-money laundering and terrorism financing compliance within each issuing organization. That person must be based in the United States and must not have prior convictions for offenses including insider trading, cybercrime, or financial fraud. The proposal further notes that enforcement action would generally not be pursued against an issuer if adequate compliance procedures are already in place.
The Treasury’s proposal is the latest in a series of regulatory steps taken by federal agencies to implement the GENIUS Act. The Federal Deposit Insurance Corporation released its own proposal on Tuesday, and the Treasury’s Office of the Comptroller of the Currency issued its version in February. The FDIC’s proposal, according to Warren Kornfeld, senior vice president at Moody’s Ratings Financial Institutions Group, extends beyond stablecoins to also cover tokenized deposits within the banking sector.
Kornfeld noted that while the adoption of the FDIC’s framework remains uncertain, its enactment could give rise to a layered digital cash ecosystem structured around risk and regulatory profiles. The Treasury’s proposal is currently open for public comment, with a 60-day window for submissions. The coordinated activity across multiple agencies signals a concerted federal effort to establish comprehensive oversight of the stablecoin market.
Originally reported by Decrypt.
