FDIC Set to Apply Bank Secrecy Act and Sanctions Compliance Standards for Stablecoin Issuers

The Federal Deposit Insurance Corporation (FDIC) has approved a proposal that would implement the Bank Secrecy Act (BSA) and sanctions compliance standards for permitted payment stablecoin issuers (PPSIs).

The notice of proposed rulemaking, approved by the FDIC Board, would require FDIC-supervised PPSIs to comply with applicable regulations, as required by the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act).

These regulations include rules regarding anti-money laundering/countering the financing of terrorism (AML/CFT) and economic sanctions programs, and reporting requirements, including requirements established by the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control.

The proposal also establishes a consultation process between FinCEN and the FDIC relating to AML/CFT enforcement actions or significant AML/CFT supervisory actions.

When the FDIC intends to initiate an AML/CFT enforcement action or a significant AML/CFT supervisory action, it will provide the Director of FinCEN with an opportunity to review the proposal and consider their input.

The notice stated that the FDIC “believes the proposed rule would establish supervisory expectations for PPSIs, help combat illicit finance risk, and continue to support the responsible growth and use of digital assets and related technologies in the banking sector.”

Comments on the proposed rule will be accepted for 60 days after publication in the Federal Register.

Under the GENIUS Act, the FDIC is the primary Federal regulator of PPSIs that are subsidiaries of insured state non-member banks and state savings associations approved by the FDIC to issue payment stablecoins.