The US Treasury Department is preparing comprehensive regulations targeting stablecoin issuers, aiming to bolster financial oversight and strengthen efforts to prevent illicit activity. The forthcoming rules are designed to address potential threats to the US financial system and will require firms to take on greater responsibilities in the fight against illegal financial transactions.
Key compliance requirements under the new rules
According to a draft prepared in coordination with the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC), stablecoin companies would be obligated to implement technical measures to block, freeze, or reject certain transactions. Compliance with the Bank Secrecy Act will be mandatory, and firms will be expected to closely monitor suspicious activities, dedicating extra resources to scrutinize high-risk users and operations.
Links to previous legislation and government strategy
The proposed reforms are also linked to the National US Stablecoin Innovation Act (GENIUS), the first major federal law for the crypto sector, passed last year. In the upcoming regulation cycle, the Treasury is seeking a model that encourages companies to develop their own risk assessment strategies while maintaining adequate government oversight.
Treasury Secretary Scott Bessent emphasized that their latest initiative is aimed at securing the US financial system without hindering American companies’ innovation in the payment stablecoin sector.
Market leaders such as Tether, Circle, and Ripple, as well as organizations like World Liberty Financial—partially owned and managed by members of the Trump family—have long anticipated clearer guidelines from regulators. Under the new rules, these firms will be expected to strengthen their internal controls and develop systems capable of identifying connections to individuals or entities targeted by US authorities.
On the sanctions front, large cryptocurrency exchanges like Binance have drawn scrutiny in the past for alleged violations. OFAC is expected to require stablecoin companies to identify and block any activity—whether on primary or secondary markets—that could breach American sanctions regulations before it occurs.
The relationship between the US crypto sector and government remains complex and frequently unpredictable. While the new measures seek to ensure stablecoins are managed transparently and safely, these requirements occasionally clash with the industry’s foundational focus on decentralization and autonomy.
Decentralized finance (DeFi) continues to facilitate direct peer-to-peer transactions by removing intermediaries. Nonetheless, discussions around implementing effective crime prevention tools and regulatory clarity for DeFi are ongoing and have yet to yield definitive outcomes.
Earlier this year, the Office of the Comptroller of the Currency, which oversees national banks and trust funds, released new standards and tracking protocols tailored for stablecoin issuers. In parallel, the Federal Deposit Insurance Corporation, responsible for overseeing deposit insurance, announced a similar proposal this week.
The GENIUS Act is scheduled to take full effect by 2027. However, numerous companies have already begun pursuing licenses and partnership agreements for stablecoin operations, ahead of the law’s full implementation. At the start of the year, World Liberty submitted an application to establish a trust bank for its US dollar-based stablecoin, USD1.
World Liberty recently came back into the spotlight following allegations involving its partner, AB DAO, which was reportedly connected to a project run by Cambodia-based Prince Group. Prince Group has faced significant sanctions and investigations from the US in the past year, and new regulations would subject such business ties to much closer scrutiny.
