Treasury proposes tougher stablecoin rules

The U.S. Treasury is moving to make stablecoin companies work less like software startups and more like money transmitters with bank-style compliance teams. A proposal released on April 8 would require issuers to run anti-money-laundering and sanctions programs, file suspicious activity reports, keep records, and perform customer due diligence. (americanbanker.com; bankingjournal.aba.com) That is a big shift for a product that was sold as digital cash that moves on blockchains around the clock. A payment stablecoin is usually a token designed to stay at $1, and the new federal framework treats the company behind that token as a financial institution under the Bank Secrecy Act. (federalregister.gov; complyfactor.com) The law behind this is the Guiding and Establishing National Innovation for U.S. Stablecoins Act, which became law on July 18, 2025. Treasury said in a 2025 rulemaking notice that the statute was meant to encourage payment stablecoins while also addressing illicit finance, consumer protection, and financial stability risks. (federalregister.gov) The newest proposal comes from Treasury’s Financial Crimes Enforcement Network and Office of Foreign Assets Control, which are the offices that police money laundering and sanctions. Their rule would apply those duties directly to permitted payment stablecoin issuers instead of leaving compliance as a loose expectation. (bankingjournal.aba.com; coindesk.com) One detail matters a lot for engineers: Treasury is not just asking issuers to screen the wallet that first buys or redeems a token. Reporting says the proposal also expects monitoring in secondary markets, which means watching how tokens move after they leave the issuer’s own platform. (americanbanker.com; coindesk.com) That pushes stablecoin design toward built-in intervention points. If an issuer is expected to stop blocked parties from using a token, the token or the surrounding system may need tools to freeze, blacklist, or otherwise control transfers after launch. (coindesk.com; coin-views.com) Treasury is also building a split system for who regulates these firms. Under a separate proposed rule issued on April 1, issuers with less than $10 billion in outstanding stablecoins can choose state supervision if their state regime is judged “substantially similar” to the federal one. (bankingjournal.aba.com; consumerfinancialserviceslawmonitor.com) But Treasury did not leave every topic to the states. The April 1 proposal says states would have broad discretion in areas like capital standards, while anti-money-laundering and sanctions requirements would stay uniform across state and federal regimes. (bankingjournal.aba.com) The practical result is that a stablecoin issuer now needs more than reserves and monthly attestations. It may need transaction monitoring software, sanctions screening, audit trails, independent testing, and staff who can explain to regulators why a token transfer was allowed, blocked, or reported. (americanbanker.com; pymnts.com) Treasury is taking public comment for 60 days after publication in the Federal Register, so the final shape can still change. The direction is already clear: if you want to issue a dollar token in the United States, Washington increasingly expects you to build a programmable compliance system around it. (bankingjournal.aba.com; federalregister.gov)