The US Department of the Treasury has unveiled a proposal that would require stablecoin issuers to implement stringent controls to prevent and detect illicit transactions, including the ability to block, freeze, and reject suspicious transactions. The proposal, jointly introduced by the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC), aims to bring stablecoin firms in line with traditional financial institutions in terms of anti-money laundering and combating the financing of terrorism.
The new rules would also require stablecoin issuers to identify and report high-risk customers and activities, as well as to cooperate with US authorities in pursuing targets of investigation. The proposal is part of the implementation of the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, which was passed last year. The rules are expected to be finalized after a public comment period, and would apply to all stablecoin issuers operating in the US. The move is seen as a significant step towards regulating the stablecoin industry, which has been seeking clarity on its regulatory obligations.
The proposal has been welcomed by the industry, with many seeing it as a positive step towards establishing stablecoins as a safe and reliable asset class.