The U.S. Treasury Department's sanctions agency and its financial crimes bureau released a joint rule proposal for stablecoin issuers to curb financial crimes, which Treasury Secretary Bessent said will protect the U.S., without stifling innovation.

On Wednesday, the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) issued a rule as part of the new law, the Guiding and Establishing National Innovation for U.S. Stablecoins, or GENIUS. The proposed rule focused on countering the financing of terrorism (CFT) and anti-money laundering (AML).

"President Trump is strengthening American leadership in digital financial technology," said Secretary Bessent in a statement. "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 rulemaking is part of a broader regulatory push as federal agencies work toward a January 2027 compliance deadline under the GENIUS Act. The law created a federal regulatory framework for stablecoins, requiring stablecoins to be fully backed by U.S. dollars or similarly liquid assets, mandating annual audits for certain issuers, among other standards.

On Tuesday, the Federal Deposit Insurance Corporation proposed a rule setting forth requirements around reserves and asserted that stablecoins would not be "subject to federal deposit insurance." Last month, the Office of the Comptroller of the Currency also issued a proposed rule, drawing jurisdiction over certain issuers like subsidiaries of national banks or federal savings associations.

The proposed rulemaking from OFAC and FinCEN would apply to permitted payment stablecoin issuers, which the GENIUS law defines as a stablecoin issuer that is a subsidiary of an insured depository institution or is allowed to issue stablecoins by a federal or state regulator.

Issuers would be required to establish and maintain robust AML and CFT programs, including risk identification and mitigation measures. FinCEN indicated it would take a measured supervisory approach, saying it would not bring an enforcement action or a "major supervisory action, unless the PPSI has a significant or systemic failure to maintain that program."

"The proposed rule would ensure FinCEN plays a central role in AML/CFT supervision, including through the introduction of a notice and consultation framework between the primary Federal payment stablecoin regulators and FinCEN with respect to significant AML/CFT supervisory actions," according to a fact sheet.

As for OFAC, the agency said it would require issuers to have an "effective sanctions compliance program." It would require issuers to create a system of "risk-based internal controls" and do regular auditing and testing.

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