The Federal Deposit Insurance Corporation has moved forward with a proposed rule that would set anti-money laundering and sanctions compliance standards for stablecoin issuers backed by banks. The measure, which applies to FDIC-supervised stablecoin issuers, was advanced under the GENIUS Act — a piece of legislation that gives the agency new authority over digital-dollar tokens.
What the rule demands
The proposed rule would require stablecoin issuers to meet Bank Secrecy Act obligations and Treasury Department sanctions screening requirements. That means issuers would need to establish customer identification programs, report suspicious activity, and block transactions involving sanctioned entities. The rule also outlines enforcement provisions for firms that don't comply.
The FDIC's move is the first major regulatory step targeting stablecoins under the GENIUS Act, which Congress passed last year. The law explicitly gave the FDIC oversight of stablecoins that are linked to FDIC-insured banks — a category that covers most major dollar-pegged tokens.
Treasury consultation and enforcement
The proposed rule requires stablecoin issuers to consult with the Treasury Department on sanctions compliance, a standard that goes beyond typical bank regulations. Issuers would need to submit compliance plans and undergo regular examinations. The FDIC can impose penalties, revoke approvals, or seek court orders against violators.
The agency says the rule is designed to close gaps that have allowed illicit finance to flow through stablecoin networks. Without such standards, stablecoins could be used to bypass the banking system's existing safeguards, the FDIC argued in the proposal.
Who's affected
The rule only applies to stablecoin issuers that are already supervised by the FDIC — meaning those that hold their reserves in FDIC-insured banks or are subsidiaries of FDIC-regulated institutions. That's a relatively small group today, but the number could grow as more traditional banks enter the crypto space.
Issuers that aren't bank-linked, such as those backed by commercial paper or other assets, fall outside the FDIC's reach. That distinction is likely to spark debate over whether the rule creates a two-tier system for stablecoin regulation.
What happens next
The FDIC will accept public comments on the proposed rule for 60 days before finalizing it. Industry groups, consumer advocates, and blockchain firms are expected to weigh in on how the compliance burden compares with existing state-level frameworks. The agency hasn't said when a final rule might take effect.
