The US Treasury is preparing a stricter regulatory framework for stablecoin issuers, with draft rules that would require companies to build technical systems able to block, freeze, or reject certain transactions. The proposal was prepared in coordination with the Financial Crimes Enforcement Network, or FinCEN, and the Office of Foreign Assets Control, known as OFAC. Compliance with the Bank Secrecy Act would be mandatory, and firms would need to intensify monitoring of suspicious activity.
Draft rules push issuers toward transaction-level controls
Under the draft, stablecoin companies would be expected to devote extra resources to higher-risk users and operations. The focus is not limited to standard compliance checklists. Regulators want issuers to detect suspicious behavior earlier, review transactions with greater precision, and maintain systems capable of stopping activity before it breaches US rules.
OFAC is expected to require stablecoin firms to identify and block conduct that could violate American sanctions regulations, whether the activity occurs in primary markets or secondary markets. That raises the bar for issuers. They would need internal systems able to trace links to individuals or entities targeted by US authorities and act before a transfer is completed.
GENIUS Act sets the wider legal backdrop
The reform effort is tied to the National US Stablecoin Innovation Act, or GENIUS, described in the report as the first major federal law for the crypto sector. The law passed last year and is scheduled to take full effect by 2027. During the upcoming regulatory cycle, the Treasury is looking for an approach that lets companies develop their own risk assessment models while preserving direct government oversight.
Treasury Secretary Scott Bessent said the latest initiative is intended to protect the US financial system without hindering innovation by American companies in the payment stablecoin sector. That framing shows how officials are trying to balance financial crime controls with room for product development, even as the compliance burden grows.
Major issuers and affiliated groups face closer review
The report names Tether, Circle, and Ripple among the market leaders that have long waited for clearer regulatory guidance. Organizations such as World Liberty Financial are also included in that group. Under the new rules, these firms would be expected to strengthen internal controls and build tools that can detect connections to sanctioned or otherwise restricted persons and entities.
World Liberty Financial draws added attention because it is partially owned and managed by members of the Trump family. Earlier this year, the company applied to establish a trust bank for its US dollar-denominated stablecoin, USD1. It also returned to the spotlight after allegations involving its partner, AB DAO, which was reportedly linked to a project run by Cambodia-based Prince Group. Prince Group has faced substantial US sanctions and investigations over the past year, and the proposed rules would subject business ties of that kind to much tighter scrutiny.
OCC and FDIC are moving in parallel while DeFi remains unresolved
Other US agencies are moving on the same track. Earlier this year, the Office of the Comptroller of the Currency released new standards and tracking protocols designed for stablecoin issuers. This week, the Federal Deposit Insurance Corporation announced a similar proposal. The combined activity suggests that stablecoin oversight in the US is being built across several agencies at once.
The tension with the crypto sector remains clear. Stablecoins are being pushed toward a more transparent and controlled model, while parts of the industry still center on decentralization and autonomy. DeFi continues to enable direct peer-to-peer transactions without intermediaries, but discussions on crime-prevention tools and clear DeFi regulation are still open, with no final outcome yet. Even before the GENIUS Act is fully in force, many companies have already started seeking licenses and partnership agreements for stablecoin operations.