FDIC Proposes GENIUS Act Rules To Establish AML And Sanctions Compliance Standards For Stablecoin Issuers
In Brief
FDIC proposes GENIUS Act stablecoin rules requiring AML, sanctions and reporting compliance for supervised issuers, with expanded enforcement powers, FinCEN coordination, and public consultation period.
Federal Deposit Insurance Corporation (FDIC) has proposed new rules under the Guiding and Establishing National Innovation for U.S. Stablecoins Act, or GENIUS Act, to set Bank Secrecy Act and sanctions compliance standards for FDIC-supervised permitted payment stablecoin issuers.
The agency said the draft would require these issuers to maintain anti-money laundering and countering the financing of terrorism programs, follow economic sanctions rules, and meet reporting obligations tied to the Financial Crimes Enforcement Network and the Office of Foreign Assets Control. The proposal would also align supervision and enforcement procedures for these programs with FinCEN requirements.
The FDIC, an independent agency created by Congress to support stability and public confidence in the U.S. financial system, serves as the primary federal regulator for permitted payment stablecoin issuers that are subsidiaries of insured state nonmember banks and state savings associations approved by the agency. To implement that role, the proposal would amend 12 CFR Part 350 by adding new compliance requirements for FDIC-supervised issuers and creating a separate subpart covering AML/CFT oversight and enforcement.
FDIC Outlines Enforcement Framework And Oversight Process For Stablecoin Issuers
Under the draft framework, enforcement measures could include cease-and-desist orders, written agreements, consent orders, memoranda of understanding, and civil money penalties, along with other supervisory actions related to alleged violations, weaknesses, or unsafe practices.
Before taking certain actions, the FDIC would give the director of FinCEN at least 30 days to review the planned step, except in cases where faster action is required. Relevant examination materials and issuer submissions would be shared with FinCEN, subject to protections for privileged information.
The FDIC said the proposal is intended to improve the clarity, consistency, and effectiveness of BSA and sanctions supervision. Public comments will be accepted for 60 days after the rule is published in the Federal Register.
The measure follows an earlier FDIC proposal in April covering reserves, redemption, capital, risk management, custody, and deposit insurance treatment for stablecoin-related activity. The agency estimates that five to 30 FDIC-supervised institutions could seek approval to issue payment stablecoins through subsidiaries in the first years after the GENIUS Act takes effect.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in crypto, AI, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in crypto, AI, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
