US Treasury proposes AML rules for stablecoins under GENIUS Act

The U.S. Treasury Department has laid out a fresh set of expectations for stablecoin issuers, focusing on how firms must address illicit finance risks under the GENIUS Act.

Summary

• Treasury has proposed AML and sanctions rules that will bring stablecoin issuers under Bank Secrecy Act compliance.
• Issuers are required to build systems to block, freeze, or reject transactions and have appointed a US based compliance lead.

In a notice issued Wednesday, the department confirmed that its Financial Crimes Enforcement Network and Office of Foreign Assets Control had jointly proposed rules aimed at translating the law into operational requirements

The proposal stems from provisions within the GENIUS Act, signed into law in July 2025, as regulators continue working to translate the legislation into enforceable rules.

According to the proposal, payment stablecoin issuers will need to put in place anti money laundering and counter terrorism financing programs, alongside sanctions compliance frameworks. The rules also require firms to build systems capable of identifying and acting on suspicious activity, including the ability to “block, freeze, and reject” transactions when necessary.

Authorities are effectively placing stablecoin issuers within the same regulatory perimeter as traditional financial institutions. By bringing them under the Bank Secrecy Act, the framework requires issuers to support law enforcement efforts tied to financial crime detection and prevention.

Further, each issuer must appoint a designated individual responsible for compliance systems, with eligibility limited to U.S.-based personnel who have no record of financial misconduct such as fraud, cybercrime, or insider trading.

“President Trump is strengthening American leadership in digital financial technology,” Treasury Secretary Scott Bessent said, adding that the proposal would “protect the U.S. financial system from national security threats without hindering American companies’ ability to forge ahead in the payment stablecoin ecosystem.”

FinCEN has opened a 60-day public comment period for feedback on the proposed rules.

GENIUS Act enforcement begins to take shape

Work on implementing the GENIUS Act has been unfolding across multiple agencies. FinCEN and OFAC are the latest agencies who have outlined their approach, following recent proposals from the Federal Deposit Insurance Corporation and earlier guidance issued by the Office of the Comptroller of the Currency.

The FDIC clarified that stablecoin holders themselves would not receive deposit insurance under the framework, though reserves backing issued tokens would be protected

Parallel discussions have also been underway on how oversight responsibilities will be shared between federal and state authorities, particularly for smaller issuers that may qualify for state level supervision if they meet required standards.