The United States Department of the Treasury has proposed groundbreaking new regulations that will formally bring payment stablecoin issuers under federal anti-money laundering (AML) and sanctions compliance obligations for the first time.
Historic Regulatory Shift for Digital Assets
On April 8, 2026, the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) issued a joint Notice of Proposed Rulemaking (NPRM) that classifies permitted payment stablecoin issuers (PPSIs) as financial institutions subject to the Bank Secrecy Act (BSA). This 303-page proposed rule implements the anti-money laundering/countering the financing of terrorism provision of the GENIUS Act, which was signed into law on July 18, 2025.
The GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act) established the first comprehensive federal regulatory framework for payment stablecoins in the United States, restricting issuance to federally or state-supervised entities.
Key Compliance Requirements for Stablecoin Issuers
Under the proposed rule, permitted payment stablecoin issuers must establish and maintain comprehensive AML/CFT programs with specific mandatory features:
Core AML/CFT Program Components
- Internal policies, procedures, and controls ensuring BSA compliance, including risk assessment processes and ongoing customer due diligence
- Independent testing of the issuer’s AML/CFT program with written documentation available for FinCEN review
- U.S.-based AML/CFT officer who resides in the United States (individuals with felony convictions related to financial crimes are barred from this role)
- Ongoing employee training program covering AML and sanctions compliance
Reporting and Recordkeeping Obligations
Permitted payment stablecoin issuers must meet extensive BSA obligations including:
- Filing Suspicious Activity Reports (SARs) for primary market activity at a $5,000 threshold
- Filing Currency Transaction Reports (CTRs)
- Complying with the BSA’s Recordkeeping Rule for fund transfers of $3,000 or more
- Transmitting required information under the Travel Rule to other financial institutions
- Conducting ongoing customer due diligence, including correspondent and private banking account programs
Technical Capabilities for Transaction Monitoring
A provision specific to the GENIUS Act requires issuers to maintain technical capabilities to block, freeze, and reject transactions that violate federal or state law or any lawful order from regulators or law enforcement. These technical controls apply across both primary and secondary stablecoin markets, representing a significant operational requirement for digital asset platforms.
Sanctions Compliance Program Requirements
OFAC is requiring PPSIs to adopt an effective sanctions compliance program built around five core elements:
- Senior management commitment
- Risk assessment
- Internal controls
- Testing
- Training
Issuers must build risk-based safeguards to identify and reject transactions violating U.S. sanctions. Existing special measures targeting specific jurisdictions and institutions will also apply to permitted payment stablecoin issuers.
Regulatory Oversight and Enforcement Approach
FinCEN stated it generally will not pursue enforcement actions against issuers whose programs meet the rule’s standards, absent significant or systemic failures. The agency will play a central oversight role and must be notified before other regulators take major supervisory actions.
The rule proposes coordination between FinCEN and primary federal stablecoin regulators prior to any supervisory action. Enforcement actions or major supervisory actions would be limited to cases where issuers have significant or systemic failures to maintain their programs.
Treasury Secretary’s Statement
Treasury Secretary Scott Bessent emphasized the administration’s position on the new regulations: “President Trump is strengthening American leadership in digital financial technology. This proposal will protect the U.S. financial system from national security threats without hindering American companies’ ability to forge ahead in the payment stablecoin ecosystem”.
Industry Impact and Next Steps
Major stablecoin issuers including Circle and Tether, along with new market entrants, will need to assess how the proposed requirements affect their existing compliance structures. The rule’s risk-based design aims to direct resources toward higher-risk customers and activities.
The NPRM will be published in the Federal Register in the coming days, with FinCEN and OFAC expected to set a 60-day public comment period upon publication. Stakeholders operating in the stablecoin sector should review the full rulemaking and consider submitting comments before the deadline.
Related Regulatory Developments
This rulemaking complements earlier Treasury actions:
- March 2026: The Office of the Comptroller of the Currency issued proposed prudential standards covering reserve asset requirements
- Early April 2026: Treasury released a separate NPRM establishing principles for state-level regulatory regimes, allowing issuers with less than $10 billion in outstanding stablecoins to elect state oversight under an approved framework
Reserve and Reporting Requirements Under GENIUS Act
Permitted payment stablecoin issuers must publish monthly reports on reserve asset composition examined by registered public accounting firms. Reserves must consist of cash or permitted assets including Treasury securities, repurchase agreements, government money market funds, bank deposits, or tokenized versions of the same.
The GENIUS Act prohibits issuers from paying yield or interest on stablecoins and prohibits tying arrangements requiring customers to purchase other products. All reserve reports must be certified by the CEO and CFO and examined monthly by registered public accounting firms.
Global Implications
The proposed regulations position the United States as setting a global standard for stablecoin regulation. Foreign issuers may offer stablecoins in the U.S. only if subject to comparable regulatory regimes determined by the Secretary of the Treasury, registered with the OCC, and holding reserves in U.S. financial institutions.
This regulatory framework represents a watershed moment for cryptocurrency compliance, bringing digital asset issuers into the mainstream financial regulatory system while maintaining America’s competitive position in financial technology innovation.