The stablecoin news coming out of Washington this week goes beyond deposit and redemption – FinCEN, the Treasury’s financial crimes unit, has proposed rules that will fundamentally change how stablecoin issuers and all US financial institutions handle anti-money laundering compliance, moving from box-checking measures to risk-based accountability for illegal transactions.
Summary
- FinCEN published a proposed rule on April 7 that would “fundamentally transform” the BSA’s compliance programs for all financial institutions — including stablecoin issuers, which are considered financial institutions under the GENIUS Act — requiring them to create risk-based AML frameworks that focus on illegal financial threats instead of prescribed documents.
- Treasury Secretary Scott Bessent has framed the proposal clearly as a reduction in the burden of compliance: the goal is to redirect resources from low-risk activities to high-risk ones, with enforcement actions reserved only for “serious or systemic failure”.
- Under the new framework, stablecoin issuers must build programs around four main pillars: internal policies and controls that include risk assessments, a designated BSA compliance officer located in the US, employee training tailored to the company’s risk profile, and independent evaluation of program performance.
The most relevant stablecoin news for compliance groups this week doesn’t come from the FDIC or the OCC. It’s from FinCEN. The Financial Crimes Enforcement Network proposed laws on April 7 that would overhaul the way all US financial institutions – including stablecoin issuers – manage their anti-money laundering programs. A key shift: from measuring compliance by the volume of filings and paperwork to measuring it by demonstrating effectiveness in identifying and stopping illicit funds.
Treasury Secretary Scott Bessent explained the intent directly: “Our proposal restores common sense by focusing on keeping bad actors out of the financial system, not burying America’s banks in a different way.” FDIC Chairman Travis Hill, whose agency is the proposed regulator, called it “perhaps the most significant change Congress has considered in the AML Act.”
The GENIUS Act, which was signed into law in July 2025, classified all stablecoin issuers allowed to pay as “financial institutions” under the Bank Secrecy Act. That classification means that FinCEN’s proposal applies to them with the same force that it applies to banks. Stablecoin firms that previously operated under light compliance rules – relying on government money transmitter licenses and minimal internal monitoring – must now build systems that meet bank-level AML standards.
This is not a requirement for the future. The implementing regulations of the GENIUS Act must be finalized by July 18, 2026. Any stablecoin issuer operating after that date without a compliant program faces potential enforcement actions including civil fines, criminal prosecution, and license revocation.
The Four Pillars FinCEN Now Requires
Under the proposed framework, all integrated financial institutions – including stablecoin issuers – must build their AML program on four main components. First: internal policies, procedures, and controls, including a documented risk assessment process that identifies the specific financial threats the manufacturer faces based on its customers, products, and location. Second: a BSA compliance officer physically located in the United States who has oversight authority over the program. Third: continuous training of employees in line with the actual risk profile of the institution. Fourth: an independent audit by an outside party that assesses whether the program has been implemented effectively — with clear language that prevents auditors from substituting their judgment for the institution’s risk-based decision.
The proposal also limits where enforcement is due. FinCEN said it generally won’t initiate significant regulatory action unless an agency has a “significant or systematic failure” to maintain its system — a standard intended to protect well-run systems from technology breaches that don’t pose an illicit financial risk.
As crypto.news reported, the FDIC simultaneously proposed its own 191-page stablecoin rule that includes reserves and redemption standards. As noted by crypto.news, the enforcement framework of the GENIUS Act includes the Treasury, the Federal Reserve, the OCC, and the FDIC – FinCEN and OFAC play the main roles in sanctions and AML oversight. FinCEN’s proposal fills a structural compliance gap left open.
Comments on the proposed rule must be issued 60 days after publication in the Federal Register, before the July 18 regulatory deadline.
