FDIC Proposes Stablecoin Rules for AML and Sanctions Compliance

The Federal Deposit Insurance Corporation approved a notice of proposed rulemaking on May 22 that would require stablecoin issuers under its supervision to comply with Bank Secrecy Act and federal sanctions standards, marking the latest step in implementing the GENIUS Act framework for regulated payment stablecoins. The proposal targets permitted payment stablecoin issuers, or PPSIs, that operate as subsidiaries of insured state nonmember banks and state savings associations. Under the plan, these issuers would need to establish antimony laundering and counterterrorist financing programs, screen against Office of Foreign Assets Control sanctions lists, and fulfill standard reporting requirements including suspicious activity reports.

The proposal would amend section 350 of the FDIC’s regulations to add compliance standards and create a new subpart governing supervision and enforcement of AML/CFT programs at stablecoin subsidiaries. The enforcement framework includes cease and desist orders, written agreements, consent orders, and civil money penalties. Before taking certain enforcement actions, the FDIC would provide the director of the Financial Crimes Enforcement Network at...