On May 22, the Federal Deposit Insurance Corporation (FDIC) Board of Directors approved a notice of proposed rulemaking to extend Bank Secrecy Act (BSA) and sanctions compliance standards to the permitted payment stablecoin issuers (PPSIs) it supervises under the Guiding and Establishing National Innovation for U.S. Stablecoins Act (the GENIUS Act).  These GENIUS Act BSA and sanctions compliance rules for PPSIs were recently proposed by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC), as we discussed in a prior advisory.

The FDIC proposal would require FDIC-supervised PPSIs to comply with anti-money laundering/countering the financing of terrorism (AML/CFT) program requirements under the BSA, as well as “applicable” OFAC regulations, which are expected to include the proposed sanctions compliance program requirement set out by OFAC specifically for PPSIs.  

Comments are due 60 days after publication in the Federal Register.

Who the rule covers

The FDIC is the primary federal payment stablecoin regulator for PPSIs that are subsidiaries of insured state nonmember banks and state savings associations, and the proposed rule applies directly to those FDIC-supervised PPSIs. PPSIs supervised by the Office of the Comptroller of the Currency or the Federal Reserve fall within those agencies’ separate but similar regulatory frameworks.

What the proposal would require

FDIC-supervised PPSIs would have to comply with the AML/CFT and economic sanctions program and reporting requirements that apply to PPSIs.

Supervision and enforcement aligned with FinCEN

Beyond extending these compliance program obligations, the proposal would establish supervision and enforcement provisions for PPSI AML/CFT programs and align them with FinCEN’s requirements. The aim is to ensure that a PPSI’s program is examined and enforced on terms consistent with the broader financial crime regime rather than under a standalone FDIC standard.

Comment period and participation

The proposal is open for comment for 60 days after publication in the Federal Register. Prospective FDIC-supervised PPSIs, trade associations, and other stakeholders can use that window to weigh in before the agency decides whether and how to finalize the rule.

Our Take

The proposal is one piece of a broader Treasury-led effort to implement the GENIUS Act, and also follows earlier FDIC proposals on application procedures for institutions seeking to issue payment stablecoins and on GENIUS Act requirements and standards more generally. 

Firms weighing whether to seek approval, or already planning issuance, should map their compliance programs to FinCEN and OFAC requirements now and consider using the comment period to raise practical concerns about how compliance, supervision and enforcement will work day-to-day.