The US Department of the Treasury has proposed a set of rules for stablecoin issuers, aiming to prevent illicit activities and ensure compliance with financial regulations. The proposal, jointly submitted by the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC), outlines the requirements for stablecoin businesses to implement controls such as blocking, freezing, and rejecting suspicious transactions. The rules also mandate that stablecoin issuers maintain internal protections to comply with the Bank Secrecy Act, which governs the US financial system.
The proposal is part of the implementation of the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, the first major crypto-sector law in the US. The Treasury Department is seeking public comment on the proposal, which is expected to be finalized by 2027.
The rules are designed to protect the US financial system from national security threats while allowing American companies to innovate in the payment stablecoin ecosystem. The proposal requires stablecoin issuers to identify and evaluate their money laundering, terrorist financing, and illicit finance risks, and to implement risk-based safeguards for stablecoin activity on primary and secondary markets. The rules also mandate that stablecoin issuers scour their records for any activity tied to individuals or entities flagged by FinCEN and act as allies in the agency's pursuit of entities identified as primary money laundering concerns.
The proposal is expected to have a significant impact on the stablecoin industry, with companies such as Tether, Circle, and Ripple awaiting regulation to establish their assets as safe and reliable.