The U.S. Treasury, together with Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC), has issued extensive proposed rules under the GENIUS Act to strengthen anti-money laundering (AML) and sanctions compliance in the stablecoin sector. Spanning more than 300 pages, the proposals focus in part on defining the role of stablecoin issuers in secondary market activity and expanding due diligence obligations. Notably, regulators estimate that around 50 permitted payment stablecoin issuers will be active on average خلال the first three years, reflecting expectations of a relatively concentrated but institutionally anchored market.

A key element of the framework is the extension of enhanced due diligence requirements to stablecoin issuers in situations resembling correspondent banking relationships. This applies where issuers provide ongoing financial services - such as issuance, redemption, custody, or reserve management - to foreign financial institutions or high-value clients. While similar standards already exist for foreign banks and large private accounts, the proposals broaden their application to include stablecoin-related activities, potentially covering both non-U.S. institutions and higher-risk client structures. In contrast, self-hosted wallets are largely absent from the proposals, signaling a deliberate regulatory focus on institutional counterparties rather than decentralized end users.

On secondary market activity, the Treasury largely preserves the current approach: stablecoin issuers are not required to monitor or report transactions that occur outside their direct involvement. Transfers interacting with a smart contract alone do not trigger reporting obligations such as suspicious activity reports. However, issuers must ensure the technical ability to freeze or block transactions where necessary. The framework also reinforces centralized oversight, requiring regulators to notify FinCEN before taking significant supervisory action. Overall, the proposals aim to balance financial integrity with operational feasibility while leaving key assumptions - including market structure and participant composition - open to industry feedback.