The US Department of the Treasury has unveiled a joint proposal by the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC), outlining stringent controls for stablecoin businesses to combat money laundering, terrorist financing, and other illicit activities. The proposed regulations would require stablecoin issuers to establish programs to identify, flag, and reject suspicious transactions, as well as maintain robust internal protections to comply with the Bank Secrecy Act. The proposal is part of the implementation of the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, which aims to regulate the stablecoin industry.
The Treasury Department is seeking public comment on the proposal, which is expected to be finalized by 2027. The regulations would also require stablecoin issuers to cooperate with US authorities in pursuing targets and entities identified as primary money laundering concerns. The proposal is seen as a significant step towards establishing a regulatory framework for the stablecoin industry, which has been awaiting clear guidelines to operate within the US financial system.