FDIC eyes expanding compliance net to stablecoin issuers on bank secrecy, sanction standards

Bank-affiliated stablecoin issuers will now be expected to comply with the same anti-money laundering and sanctions requirements that govern traditional financial institutions.

The change is due to a proposed rule that was recently approved by the Federal Deposit Insurance Corporation (FDIC). The FDIC is also separately preparing to modernize anti-money laundering (AML) rules for stablecoins. 

What is the FDIC asking stablecoin issuers to do? 

The Federal Deposit Insurance Corporation recently approved a proposed rule that will apply the Bank Secrecy Act (BSA) and its sanctions to all permitted payment stablecoin issuers (PPSIs) that operate as subsidiaries of FDIC-supervised state nonmember banks and state savings associations. 

Under the GENIUS Act, the FDIC holds primary federal regulatory authority over these entities.

The rule mandates stablecoin issuers to comply with anti-money laundering (AML) rules, rules that counter the financing of terrorism (CFT), economic sanctions programs, and reporting obligations set by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC).

The rule would also give the FDIC supervision and enforcement powers over these AML/CFT programs. 

This proposal is the FDIC’s third rulemaking tied to the GENIUS Act. The agency first proposed an application process for bank subsidiaries intended to issue stablecoins in December 2025, then followed with a prudential framework regarding reserve assets, redemption procedures, capital, and risk management standards in April 2026.

The ABA Banking Journal noted that the GENIUS Act directed all federal banking agencies to write implementing regulations for stablecoin issuers, not just the FDIC. The Office of the Comptroller of the Currency (OCC) published its own proposal in February, and FDIC Chair Travis Hill has said the agency aligned its approach with the OCC’s where relevant.

The FDIC estimates that between 5 and 30 banks will apply for and receive approval to issue stablecoins in the initial years after the GENIUS Act takes effect, which the agency expects around mid-January 2027.

Is the FDIC modernizing AML rules?

The FDIC, OCC, and National Credit Union Administration jointly proposed an overhaul of the AML/CFT framework that would redirect supervisory focus toward higher-risk customers and away from lower-risk ones.

FDIC Chair Travis Hill said in a statement that banks currently channel much of their resources into complying with BSA requirements, despite it being unclear whether or not that effort translates to advancements in law enforcement or national security efforts. 

Hill added that the risk of large fines for BSA violations serves as an incentive for banks to deny or close customers’ accounts.

The FDIC Board approved the stablecoin AML proposal unanimously, 3-0. The public has 60 days to comment on the rule after it is published.