On April 8, FinCEN and OFAC announced a joint proposed rule implementing provisions of the GENIUS Act, enacted in July 2025, which establishes a comprehensive framework for the federal regulation of payment stablecoins (covered by InfoBytes here). The proposed rule would treat permitted payment stablecoin issuers (PPSIs) as financial institutions under the BSA and subject them to anti-money laundering (AML) and sanctions compliance obligations specified in the GENIUS Act. The agencies released an accompanying fact sheet, stating that the proposed AML/CFT program largely mirrors obligations FinCEN separately proposed for the existing types of financial institutions under the BSA (covered by InfoBytes here). The proposal does not include Customer Identification Program (CIP) requirements, which the rule notes will be the subject of a separate rulemaking.

Regarding AML compliance, the proposed rule would require PPSIs to, among other things: (i) establish and maintain risk-based AML/CFT programs; (ii) file suspicious activity reports for primary, but not secondary, market activity at a $5,000 threshold; (iii) file currency transaction reports; (iv) comply with the BSA’s Recordkeeping and Travel Rules; and (v) conduct ongoing customer due diligence, including establishing due diligence programs for correspondent and private banking accounts. The proposed rule would also require PPSIs, across primary and secondary markets, to block, freeze or reject transactions that violate federal or state law and to have the “technical capabilities” to comply with the terms of any lawful order.

For sanctions compliance, OFAC would require PPSIs to adopt a sanctions compliance program covering all payment stablecoin-related activity across primary and secondary markets. Existing special measures targeting specific jurisdictions and institutions would also apply to PPSIs. With respect to enforcement, FinCEN stated it generally would not take action, and agencies on its behalf generally would not take major supervisory action, against a PPSI with a compliant AML/CFT program absent a “significant or systemic” failure in the program’s implementation. Comments on the proposed rule must be submitted by June 9.