With the impending passage of the CLARITY Act in the crypto market, a new rule introduced under the GENIUS Act has captured attention.
In a collaborative effort, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) have proposed a rule that treats payment stablecoin issuers akin to banks.
This move is aimed at combating money laundering, terrorist financing, and sanction evasion.
The proposed rule is part of the GENIUS Act, which was enacted into law by U.S. President Donald Trump in July 2025.
What prompted the Treasury to propose such a rule?
Regulators believe that payment stablecoin issuers have the potential to revolutionize the U.S. payment system. However, due to the vast financial system in the country, illicit actors can easily pose a threat to U.S. national security.
To address these risks, the rule ensures that permitted payment stablecoin issuers (PPSIs) are treated as financial institutions under the Bank Secrecy Act (BSA).
This implies imposing anti-money laundering (AML) obligations on PPSIs, which were previously exclusive to BSA.
Moreover, the proposal aims to be effective, aid law enforcement efforts, and reduce unnecessary burdens. These measures are part of the broader plan to modernize BSA requirements with consistent efforts from FinCEN.
Treasury Scott Bessent’s perspective
Commending the changes made under U.S. President Donald Trump’s administration, Treasury Secretary Scott Bessent highlighted,
President Trump is bolstering American leadership in digital financial technology.
He further stated,
This proposal will safeguard the U.S. financial system against national security threats while enabling American companies to advance in the payment stablecoin sector.
Illicit activities targeting stablecoins in 2025 and earlier
Stablecoins have been a prime target for illicit activities for several years. For example, in June 2025, U.S. federal authorities seized $225.3 million worth of Tether’s USDT linked to fraudulent schemes.
Furthermore, in July 2025, around $2 million in digital assets was confiscated by the DOJ, associated with a Palestine-based money exchange business. Similarly, in November 2024, $5.5 million in stablecoins were seized from a drug trafficking operation.
A recent report from Chainalysis revealed that in 2025, stablecoins contributed to “84% of all illicit transaction volume.”
Final Overview
- The collaborative effort to introduce a proposed rule addressing illicit activities in the stablecoin market underscores the significance of the GENIUS Act passed in July 2025.
- Given the substantial seizures and confiscations by the DOJ, this rule is crucial for fostering crypto innovation in the U.S.