U.S. Treasury Drafts Proposal to Require Stablecoin Issuers to Meet AML and Sanctions Standards

The U.S. Department of the Treasury is preparing to publish proposed rules that would require stablecoin issuers to adopt standards aimed at preventing money laundering and sanctions breaches, CoinDesk reported. A proposal summary seen by CoinDesk says Treasury's Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) will jointly set out how issuers must comply with the recently enacted GENIUS Act. The framework would require controls to prevent, freeze and reject suspicious transactions. FinCEN's approach would require issuers' anti-money laundering programs to be able to pause flagged transactions and devote more resources to high-risk customers and activities. When U.S. authorities open investigations into specific targets, regulated issuers would be required to review their records for activity tied to designated individuals or entities. OFAC would require risk-based sanctions compliance safeguards across both primary and secondary markets to detect and block transactions that could violate U.S. sanctions. The proposal notes that financial institutions are best placed to assess their own money-laundering and terrorist-financing risks, and says firms that maintain appropriate AML controls typically avoid enforcement action. Treasury Secretary Scott Bessent said the measures are intended to protect the U.S. financial system from national security threats without slowing the growth of U.S. businesses in the stablecoin ecosystem. The draft will be released for public comment and could be revised before being finalized.