Key Takeaways:
- FinCEN and OFAC issued a joint NPRM on April 8, 2026, requiring stablecoin issuers to comply with Bank Secrecy Act obligations.
- The GENIUS Act, enacted July 18, 2025, gives issuers like Circle and Tether roughly 60 days to submit public comments.
- Permitted payment stablecoin issuers must deploy technical controls to block, freeze, and reject transactions violating U.S. sanctions.
New Federal Rules Require Stablecoin Issuers to Block Sanctioned Transactions
The joint Notice of Proposed Rulemaking from the Financial Crimes Enforcement Network and the Office of Foreign Assets Control implements key provisions of the Guiding and Establishing National Innovation for U.S. Stablecoins Act, signed into law on July 18, 2025. The proposal formally classifies permitted payment stablecoin issuers, or PPSIs, as financial institutions subject to the Bank Secrecy Act.
The GENIUS Act established the first comprehensive federal framework governing payment stablecoins in the United States. It restricts issuance to federally or state-supervised entities and directs Treasury to tailor compliance obligations to the size and risk profile of each issuer.
Under the proposed rule, PPSIs must establish a written, board-approved AML/CFT program. That program must include a risk assessment process, internal controls, independent testing, ongoing employee training, and a U.S.-based compliance officer. Individuals with felony convictions related to financial crimes are barred from holding that officer role.
The proposal also requires PPSIs to file Suspicious Activity Reports for transactions that may indicate violations of law. Issuers must also comply with the Recordkeeping Rule for fund transfers of $3,000 or more and transmit required information under the Travel Rule to other financial institutions.
One provision specific to the GENIUS Act requires issuers to maintain technical capabilities to block, freeze, and reject transactions that violate federal or state law or any lawful order from regulators or law enforcement. These controls apply to both primary and secondary stablecoin markets.
On the sanctions side, OFAC is requiring PPSIs to adopt an effective sanctions compliance program built around five elements: senior management commitment, risk assessment, internal controls, testing, and training. Issuers must build in risk-based safeguards to identify and reject transactions that would violate U.S. sanctions.
FinCEN said it generally will not pursue enforcement actions against issuers whose programs meet the rule’s standards, absent significant or systemic failures. The agency will play a central role in oversight and must be notified before other regulators take major supervisory actions.
The rulemaking complements earlier Treasury action. On March 2026, the Office of the Comptroller of the Currency issued proposed prudential standards covering reserve asset requirements. In early April 2026, Treasury also released a separate NPRM establishing principles for state-level regulatory regimes, which allows issuers with less than $10 billion in outstanding stablecoins to elect state oversight under an approved framework.
Major stablecoin issuers including Circle and Tether, along with new market entrants, will need to assess how the proposed requirements affect their existing compliance structures. The risk-based design of the rule aims to direct resources toward higher-risk customers and activities.
“President Trump is strengthening American leadership in digital financial technology,” Secretary of the Treasury Scott Bessent remarked. “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 in the coming days. FinCEN and OFAC are expected to set a 60-day public comment period upon publication. A fact sheet on the proposal is available through Treasury.
Stakeholders operating in the stablecoin sector should review the full rulemaking and consider submitting comments before the deadline.
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