US regulators are pushing stablecoin issuers to build sanctions controls directly into their payment rails. A joint proposal from FinCEN and OFAC, dated April 10, 2026, would require permitted payment stablecoin issuers to maintain sanctions programs with the technical capability to block, freeze, reject, or otherwise prevent impermissible transactions on both primary and secondary markets.
Why regulators are leaning on tech
The proposal follows years of rising stablecoin use in illicit finance. Between January 1, 2015 and November 21, 2025, FinCEN logged roughly 55,000 suspicious activity reports referencing stablecoins. OFAC, meanwhile, received about 5,800 blocked-property reports and around 3,000 rejected-transaction reports tied to the same assets.
FATF has warned that estimates suggest a majority of on-chain illicit activity is now transacted in stablecoins. The watchdog has also documented uneven Travel Rule implementation across jurisdictions, which complicates screening between exchanges.
How the industry is wiring sanctions into payments
The compliance tech is already being embedded into inter-VASP flows. Notabene, which connects more than 2,000 regulated entities across 100+ jurisdictions and processes over $1 trillion in annual transaction volume, launched an open stablecoin payments and transaction-authorization network called Notabene Flow in September 2025.
In July 2025, Notabene integrated counterparty sanctions screening through a partnership with Refinitiv. The company's network exposes counterparty graph intelligence and fires real-time 'sanctions.match_detected' events through APIs. That lets automated systems make go/no-go decisions during inter-VASP transfers without waiting for a human to check a list.
The Travel Rule gap
Travel Rule implementation remains fragmented across jurisdictions and protocols. Inter-exchange screening only works if both sides support the same messaging and proof standards, and if they're aligned on the data feeds feeding those checks. That's a practical hurdle the proposal doesn't address directly.
Still, the direction is clear. OFAC guidance already directs crypto firms to run risk-based compliance programs and screen customers and transactions against sanctions lists, including the SDN list. The new proposal would make that technical capability a condition of operating as a permitted stablecoin issuer in the US.
The comment period on the joint proposal is open. How the final rule handles secondary-market transactions, where issuers may not control the counterparty, is the unresolved question that will shape how this actually works in practice.
