On April 8, 2026, the US Department of the Treasury announced a joint proposed rule by the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) to implement the anti–money laundering (AML) and sanctions compliance requirements of the Guiding and Establishing National Innovation for U.S. Stablecoins Act (the GENIUS Act).1 Enacted in July 2025 and as we described in an alert, the GENIUS Act introduced the first federal framework for the issuance and regulation of stablecoins in the United States and aimed to strengthen reserve requirements, align state and federal stablecoin laws, and require clear and conspicuous redemption procedures, among other priorities.
This rule, if adopted, represents a major step in operationalizing the framework for the regulation of stablecoins. It will bring permitted payment stablecoin issuers (PPSIs) explicitly within the framework of the Bank Secrecy Act and US sanctions laws.
Core Requirements for PPSIs
The proposal presents several requirements for PPSIs, consistent with the GENIUS Act’s mandate. Most notably, PPSIs must establish and maintain a written AML and countering the financing of terrorism (CFT) program reasonably designed to prevent misuse of payment stablecoins for illicit finance.2 The program framework closely mirrors FinCEN’s existing AML/CFT program requirements for financial institutions. Treasury emphasized in the proposed rule that AML/CFT programs should be risk-based, ensuring more resources are dedicated to higher-risk customers and activities. Like other financial institutions, PPSIs would further be required to identify, monitor and report suspicious activity to FinCEN through the filing of Suspicious Activity Reports (SARs).3 Treasury emphasized the importance of SAR reporting to ensure law enforcement visibility into illicit finance risks involving payment stablecoins. Other key elements include independent testing of AML/CFT programs, designation of a qualified AML/CFT compliance officer located in the United States and ongoing employee training tailored to the issuer’s risk profile.4
Because PPSIs will be formed in the United States pursuant to the GENIUS Act, they will be US persons under OFAC’s regulations and as such subject to OFAC sanctions requirements. However, the proposal would also specifically require PPSIs to adopt and maintain an effective sanctions compliance program.5 As noted in the preamble, this portion of the GENIUS Act “represents the first time that Federal law has explicitly mandated that a particular U.S. person have an effective sanctions compliance program.” While OFAC’s Framework for OFAC Compliance Commitments has served as a model for the proposed program requirements applicable to PPSIs since it was published in 2019, such explicit statutory and regulatory requirements are novel for US sanctions compliance. The proposed rule would require policies, procedures and internal controls designed to ensure compliance with US economic sanctions laws administered by OFAC. Among other things, the proposal would require PPSIs to have technical capabilities to block, freeze and reject transactions involving sanctioned persons or jurisdictions and to have the capability to “seize, freeze, burn, or prevent the transfer of payment stablecoins it issued” when necessary to comply with a lawful order.6 While that specific requirement is not new, the proposed rule would set out a “reasonable particularity” standard: PPSIs would be required to seize, freeze, etc., a stablecoin or wallet only if it can be identified with reasonable particularity, which may provide some protection from liability for the PPSI.
Treasury has characterized the proposal as an effort to balance innovation with national security by tailoring illicit finance controls to the specific risks presented by payment stablecoins.
Next Steps
Treasury published the proposed rule in the Federal Register on April 10, 2026. The public is invited to submit comments, which are to be received by June 9, 2026.
Significant interpretive questions remain for PPSIs beginning to assess this proposed framework. These include the standards by which regulators will evaluate the effectiveness of newly required AML/CFT and sanctions compliance programs for stablecoin issuers, the extent to which risk‑based judgments will be afforded supervisory deference, and how Treasury will assess material illicit finance risk in novel payment stablecoin business models. These open questions will inform compliance program design, examiner expectations and enforcement risk as Treasury implements this new compliance regime.
WilmerHale regularly advises financial institutions and technology‑enabled financial services providers in preparing and submitting comment letters to help shape final rules in ways that are practical, risk‑sensitive and consistent with evolving business models in the digital asset ecosystem. We also advise clients on the design and implementation of complex AML/CFT and sanctions compliance frameworks, engagement with supervisory and enforcement authorities, and the operationalization of new regulatory regimes.
Please reach out to a member of our team if you would like to discuss the implications of the proposed AML and sanctions compliance requirements for PPSIs or to seek assistance with the development of comments in response to the proposal.