The U.S. Department of the Treasury, through FinCEN and OFAC, issued a joint Notice of Proposed Rulemaking on April 8, 2026, requiring permitted payment stablecoin issuers (PPSIs) to comply with Bank Secrecy Act anti-money laundering and sanctions obligations for the first time.
Background: The GENIUS Act Framework
The proposal implements key provisions of the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), signed into law on July 18, 2025. This law created the first comprehensive federal framework for payment stablecoins in the United States, restricting issuance to federally or state-supervised entities and requiring tailored compliance obligations based on issuer size and risk. The new rule formally classifies PPSIs as financial institutions subject to the Bank Secrecy Act.
Key AML Requirements
PPSIs must establish a written, board-approved AML/CFT program including risk assessment, internal controls, independent testing, ongoing employee training, and a U.S.-based compliance officer. Individuals with felony convictions for financial crimes cannot serve as compliance officers. Issuers must file Suspicious Activity Reports for potentially illegal transactions, maintain records for fund transfers of $3,000 or more, and comply with the Travel Rule to transmit required information to other financial institutions. A unique provision under the GENIUS Act requires PPSIs to deploy technical controls to block, freeze, and reject transactions violating federal or state law or lawful regulatory orders, covering both primary and secondary stablecoin markets.
Sanctions Compliance and Technical Controls
OFAC mandates that PPSIs adopt an effective sanctions compliance program with five elements: senior management commitment, risk assessment, internal controls, testing, and training. Issuers must implement risk-based safeguards to identify and reject transactions that would violate U.S. sanctions. FinCEN generally will not pursue enforcement actions against issuers meeting the rule's standards, absent significant or systemic failures. FinCEN retains primary oversight and must be notified before other regulators take major supervisory actions.
Complementary Rules and Industry Impact
The proposal builds on earlier Treasury actions: in March 2026, the OCC issued proposed prudential standards for reserve assets; in early April 2026, Treasury released a separate NPRM establishing principles for state-level regimes, allowing issuers with less than $10 billion in outstanding stablecoins to opt for state oversight under an approved framework. Major issuers like Circle and Tether, alongside new entrants, must assess how these requirements affect their existing compliance structures. The risk-based design aims to direct resources toward higher-risk customers and activities.
“President Trump is strengthening American leadership in digital financial technology,” said Treasury Secretary Scott Bessent. “This proposal will protect the U.S. financial system from national security threats without hindering American companies’ ability to forge ahead in the payment stablecoin ecosystem.” The NPRM will be published in the Federal Register shortly, with FinCEN and OFAC expected to set a 60-day public comment period. Stakeholders should review the full rulemaking and consider submitting comments.