On May 22, the FDIC approved a proposed rule establishing Bank Secrecy Act (BSA) and sanctions compliance standards for certain FDIC-supervised permitted payment stablecoin issuers (PPSIs) under the GENIUS Act. The proposal would apply to PPSIs that are subsidiaries of insured state nonmember banks and state savings associations supervised by the FDIC.
The proposal would integrate stablecoin issuers into existing federal anti-money laundering and sanctions compliance frameworks. Specifically, the proposed rule would:
- Require compliance with AML/CFT requirements. PPSIs would be required to comply with applicable anti-money laundering and countering the financing of terrorism requirements, including regulations issued by FinCEN.
- Require compliance with sanctions obligations. PPSIs would also be required to comply with applicable economic sanctions requirements administered by the Office of Foreign Assets Control.
- Establish supervisory and enforcement standards. The FDIC stated that the proposal would align supervision and enforcement expectations for PPSI AML/CFT programs with existing FinCEN requirements and supervisory practices applicable to traditional financial institutions.
- Apply to FDIC-supervised stablecoin issuers. The FDIC reiterated that it serves as the primary federal payment stablecoin regulator for approved PPSIs that operate as subsidiaries of insured state nonmember banks and state savings associations.
Putting It Into Practice: The proposal represents another step in implementation of the GENIUS Act’s federal stablecoin framework (previously discussed here and here). Stablecoin issuers, banks, and fintech companies exploring stablecoin activities should monitor the proposal closely and assess whether existing AML/CFT and sanctions compliance programs would satisfy the FDIC’s proposed expectations.