The US Treasury is proposing AML rules for stablecoins under the GENIUS Act
The US Treasury Department has set a new set of expectations for stablecoin issuers, focusing on how firms should deal with illegal financial risks under the GENIUS Act.
Summary
- The Treasury has proposed AML and sanctions rules that would bring stablecoin issuers under Bank Secrecy Act compliance.
- Issuers are required to establish systems to block, freeze, or reject transactions and designate a US-based compliance lead.
In a notice issued on Wednesday, the Department confirmed that the Financial Crimes Enforcement Network and the Office of Foreign Assets Control have jointly proposed regulations aimed at translating the law into operational requirements.
The proposal builds on provisions within the GENIUS Act, which was signed into law in July 2025, as regulators continue to work to translate the law into binding regulations.
According to the proposal, issuers of stablecoin payments will have to put in place anti-money laundering and anti-terrorist financing systems, as well as sanctions compliance frameworks. The rules also require firms to build systems capable of identifying and processing suspicious activity, including the ability to “block, freeze, and reject” transactions if necessary.
Authorities effectively put stablecoin issuers within the same regulatory environment as traditional financial institutions. By bringing them under the Bank Secrecy Act, the draft requires issuers to support law enforcement efforts related to the detection and prevention of financial crimes.
In addition, each issuer must designate a designated person responsible for compliance systems, with eligibility limited to US-based employees who have no record of financial misconduct such as fraud, cybercrime, or insider trading.
“President Trump is strengthening America’s leadership in digital financial technology,” said Treasury Secretary Scott Bessent, adding that the proposal “will protect the US financial system from national security threats without hindering the ability of American companies to move forward with a stablecoin payment system.”
FinCEN has opened a 60-day public comment period for feedback on the proposed rules.
The law of GENIUS begins to take shape
The task of applying the GENIUS Law has been unfolding in many organizations. FinCEN and OFAC are the latest agencies to reveal their approach, following recent proposals from the Federal Deposit Insurance Corporation and earlier guidance issued by the Office of the Comptroller of the Currency.
The FDIC clarified that stablecoin owners themselves will not receive deposit insurance under the framework, although the reserves backing the issued tokens will be protected.
Similar discussions have been ongoing about how oversight responsibilities will be shared between federal and state authorities, particularly for small issuers that may qualify for state-level oversight if they meet the necessary standards.
