Providing an “appropriately tailored regime to mitigate potential illicit finance risks” with the use of payment stablecoins — while promoting “innovation” in the digital vehicles — is the aim of a proposed rule issued Wednesday by the Treasury and its arm overseeing foreign assets.
The proposal – which would implement provisions of the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), enacted last year – is designed to put into effect the law’s anti-money laundering and sanctions compliance program requirements, according to the Treasury and the Office of Foreign Assets Control (OFAC).
Treasury asserted the legislation “provides a framework for the federal regulation of payment stablecoins.” It noted that the GENIUS Act directs Treasury to issue regulations treating permitted payment stablecoin issuers (PPSIs) as financial institutions for purposes of the Bank Secrecy Act (BSA) and impose anti-money laundering obligations on PPSIs.
“The GENIUS Act also mandates that PPSIs maintain an effective sanctions compliance program and directs Treasury to issue appropriate regulations implementing such obligations,” Treasury said.
The Treasury’s Financial Crimes Enforcement Network (FinCEN) also issued a release on the proposal.
“The proposed rule would subject PPSIs to requirements applicable to financial institutions relating to prevention of money laundering and impose obligations specified in the GENIUS Act,” FinCEN said in its release. “Consistent with FinCEN’s efforts to modernize BSA requirements, the proposed obligations are designed to be fit for purpose, assist law enforcement, and minimize unnecessary burden.”
FinCEN added that the proposal PPSIs to adopt and maintain an effective sanctions compliance program as required by the GENIUS Act.
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