FDIC Proposes AML, Sanctions Rules for Stablecoin Issuers

The Federal Deposit Insurance Corporation proposed a rule that would require stablecoin issuers to maintain anti-money laundering and countering the financing of terrorism (AML/CFT) programs, apply U.S. economic sanctions authorities and collect sender and recipient identification for stablecoin transfers. The proposal is part of agency efforts to implement the GENIUS Act before the July 18 statutory deadline.

The rule would incorporate elements of Treasury enforcement standards, including provisions from the Financial Crimes Enforcement Network and the Office of Foreign Assets Control that target transaction tracing and sanctions compliance. Issuers would face specific reporting obligations tied to federal sanctions enforcement and recordkeeping for transfers.

The proposal is written to apply to U.S.-based issuers and would formalize practices already used by some firms. Regulators cited an instance in which a stablecoin issuer helped Treasury freeze roughly $344 million in crypto funds alleged to be linked to Iran. Both major stablecoins use technical controls that can lock or freeze tokens; the FDIC’s text would establish when and how those controls may be used to support sanctions actions.

The rule is open for a 60-day public comment period. After that window closes, the FDIC expects to begin formal rulemaking on the provisions.

This is the FDIC’s third GENIUS Act–related proposal. The agency published license application guidance late last year and a prudential framework in April. Other federal agencies, including Treasury, OFAC, the Office of the Comptroller of the Currency and the National Credit Union Administration, have issued proposed rules tied to the GENIUS Act.

Regulators have issued seven proposals in total so far; three have closed their public comment windows and none have been finalized. Agencies are working to complete rulemaking in advance of the July 18 implementation date.

Banking trade groups and banks have urged regulators to slow the timetable. Lobbyists have raised concerns about proposals that could allow national trust charters for crypto firms and give those firms access to Federal Reserve payment systems.

Market participants are adjusting product designs in anticipation of clearer rules. Financial firms including Fidelity, JPMorgan and U.S. Bancorp are introducing tokenized money funds intended to hold stablecoin reserves, provide immediate liquidity and generate yield on reserve balances.

Public feedback on the FDIC proposal will factor into the agency’s next steps as regulators continue to develop implementing rules for the GENIUS Act.