The US Treasury Department has announced a joint rule proposal aimed at strengthening crime prevention standards for companies issuing stablecoins. Developed by the Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN), the new proposal is intended to address concerns over financial crime without hindering innovation in the digital payments sector. Treasury Secretary Bessent said the regulations are designed to ensure national security while supporting responsible financial innovation.
New standards under the GENIUS Act
This rule proposal follows the recent implementation of the National US Stablecoin Innovation, Oversight, and Establishment Act (GENIUS Act), which sets out a fresh regulatory landscape for digital asset issuers. At the forefront of the new legislation are measures targeting money laundering and the financing of terrorism, as lawmakers seek to bring greater transparency and integrity to the digital currency sector.
Under the GENIUS Act, companies issuing stablecoins must now fully back their tokens with US dollars or other highly liquid assets. The law also introduces mandatory annual audits and establishes strict financial standards for designated issuers. Federal agencies are requiring that all market participants achieve full compliance with these guidelines by January 2027 at the latest.
In a related development, the Federal Deposit Insurance Corporation recently put forward its own proposal addressing stablecoin reserves, clarifying that digital assets issued as stablecoins will not be covered by federal deposit insurance.
Stricter compliance and oversight obligations
The new regulatory proposals stipulate that only subsidiaries of insured depository institutions or stablecoin issuers licensed by federal or state authorities may continue to operate in the sector. This marks a significant shift towards tightening the qualifications for market participation.
Eligible issuers will also be required to implement robust anti-money laundering and counter-terrorism financing programs, focusing on risk assessment and mitigation. FinCEN has indicated it will adopt a risk-based approach in its oversight, intervening only if significant or systemic deficiencies arise.
Treasury Secretary Bessent emphasized that the proposed rules will protect the US financial system from threats to national security, while ensuring that innovation in payment-based stablecoins is not stifled.
According to the proposal, FinCEN will take on a central role in overseeing compliance with anti-money laundering and counter-terrorism financing regulations. The agency also plans to collaborate closely with other relevant regulatory authorities throughout the oversight and consultation processes.
Meanwhile, OFAC intends to require stablecoin issuers to establish comprehensive sanction compliance programs. This includes risk-based internal controls, as well as regular audits and ongoing testing to ensure effective implementation of oversight measures.
