The U.S. Treasury Department will propose rules requiring stablecoin issuers to undertake anti-money laundering and sanctions compliance obligations.

The U.S. Treasury Department is about to release proposed rules requiring stablecoin issuers to establish standards for combating money laundering and sanctions violations. According to a summary of the proposal obtained by CoinDesk, the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) will jointly develop rules clarifying how issuers should comply with the GENIUS Act passed last year, including establishing controls to block, freeze, and reject suspicious transactions. FinCEN will require issuers' anti-money laundering programs to suspend flagged transactions and focus more resources on high-risk clients and activities. When U.S. authorities investigate specific targets, regulated issuers must review their own records for activities related to flagged individuals or entities. OFAC will require issuers to implement risk-based sanctions compliance safeguards in primary and secondary markets to identify and reject transactions that may violate U.S. sanctions. The proposal emphasizes respect for the industry, arguing that financial institutions best understand their own money laundering and terrorist financing risks, and that companies maintaining appropriate anti-money laundering measures generally do not face enforcement action. U.S. Treasury Secretary Scott Bessent stated that these measures will protect the U.S. financial system from national security threats without hindering the development of U.S. companies in the stablecoin ecosystem. The proposal will enter a public comment period and may be revised before being finalized.