Treasury proposes GENIUS Act rule to impose AML and sanctions compliance duties on stablecoin issuers

WASHINGTON, April 8, 2026 - The U.S. Treasury Department’s Financial Crimes Enforcement Network and Office of Foreign Assets Control on Wednesday issued a joint proposed rule to implement the anti-money laundering and sanctions compliance provisions of the Guiding and Establishing National Innovation for U.S. Stablecoins Act, or GENIUS Act. The proposal would treat permitted payment stablecoin issuers, or PPSIs, as financial institutions for Bank Secrecy Act purposes and require them to maintain effective sanctions compliance programs.

The rule is significant not simply because it adds another compliance layer to crypto. It would create one of the first U.S. regulatory regimes tailored specifically to payment stablecoin issuers, rather than forcing them to fit uneasily into legacy money transmitter rules. Treasury is proposing a framework that is both technology-specific and risk-based, aimed at stablecoin issuers that could become core infrastructure for payments, settlement and cross-border finance. Washington is no longer treating stablecoins as a peripheral crypto issue, but as a potentially systemic payments product that must be governed like part of the financial system itself.

The proposal reflects mounting concern inside Treasury that stablecoins have become deeply embedded in illicit finance. In the rulemaking, Treasury points to scams and fraud, North Korean laundering networks, terrorist financing, narcotics trafficking and sanctions evasion as prominent misuse cases. It says stablecoins are attractive to illicit actors because they combine rapid settlement, global transferability, relatively stable value and deep liquidity. Treasury cites cases tied to digital asset investment scams, Hamas-linked financing schemes, fentanyl precursor procurement, Russian sanctions evasion networks and Iranian-linked activity as evidence that stablecoins are now a preferred vehicle for moving and storing criminal proceeds.

Under the proposal, PPSIs would have to establish and maintain AML/CFT programs, report suspicious activity, conduct ongoing customer due diligence, and maintain technical capabilities, policies and procedures to block, freeze and reject transactions that violate federal or state law. They also would need the technical ability to comply with lawful orders and would be required to maintain an effective sanctions compliance program covering both primary- and secondary-market payment stablecoin activity. Treasury’ says the sanctions program would have to include senior management commitment, risk assessments, internal controls, independent testing and training.

Treasury is proposing to require technical control over the asset itself, including the ability to block, freeze, reject, and comply with lawful orders across stablecoin activity. That is a sharp signal that U.S. policymakers expect compliant stablecoins to be governable instruments, not neutral code operating beyond enforcement reach. In practical terms, the proposal could become the template for how the United States distinguishes regulated payment stablecoins from the broader digital asset market.