GENIUS Act Stablecoin Rules Advance

FDIC Moves to Bring Stablecoin Issuers Under AML and Sanctions Rules

The Federal Deposit Insurance Corporation (FDIC) has advanced a proposed rule that would require federally supervised stablecoin issuers to comply with anti-money laundering (AML), counter-terrorism financing (CFT), and economic sanctions regulations under the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act.

The FDIC recently approved a proposed rule that will apply the Bank Secrecy Act (BSA) and its sanctions requirements to all permitted payment stablecoin issuers (PPSIs) that operate as subsidiaries of FDIC-supervised state nonmember banks and state savings associations. The rule mandates stablecoin issuers to comply with AML rules, CFT rules, economic sanctions programs, and reporting obligations set by FinCEN and OFAC.

This proposal is the FDIC's third rulemaking tied to the GENIUS Act. The agency first proposed an application process for bank subsidiaries intending to issue stablecoins in December 2025, then followed with a prudential framework covering reserve assets, redemption procedures, capital, and risk management standards in April 2026.

Broader Regulatory Push Under the GENIUS Act

Congress enacted the GENIUS Act on July 18, 2025, establishing the first comprehensive federal regulatory framework for payment stablecoins in the United States. The FDIC's latest proposal sits alongside parallel rulemaking from other agencies. FinCEN and OFAC jointly issued a proposed rule to implement provisions of the GENIUS Act, aimed at encouraging innovation in payment stablecoins while providing a tailored regime to mitigate potential illicit finance risks.

The GENIUS Act mandated that PPSIs be treated as financial institutions for purposes of the Bank Secrecy Act, requiring AML and CFT compliance obligations. Critically, PPSIs will also be required to maintain effective sanctions compliance programs, the first time such compliance programs have been mandated by law.

The broader proposal would direct payment stablecoin issuers to establish and maintain an AML and CFT program, maintain a sanctions compliance program, and have the ability to "block, freeze and reject" certain stablecoin transactions.

The FDIC Board approved the stablecoin AML proposal unanimously, 3-0. The FDIC estimates that between 5 and 30 banks will apply for and receive approval to issue stablecoins in the initial years after the GENIUS Act takes effect, which the agency expects around mid-January 2027. Comments on the Treasury's joint proposed rule will be accepted until June 9, 2026.

Sources:
FDIC: Notice of Proposed Rulemaking, GENIUS Act Application Procedures
U.S. Treasury: Proposed Rule to Implement GENIUS Act Illicit Finance Requirements
Federal Register: Permitted Payment Stablecoin Issuer AML/CFT and Sanctions Compliance Program Requirements