GENIUS Act Gets Real: Stablecoin Issuers About to Feel the AML Burn

The US Treasury is making good on the GENIUS Act, and stablecoin issuers aren't going to like it. Actually, scratch that—they're going to hate it, curse it, and probably tweet about it at 2 AM while spiraling into existential crisis mode.

In a Wednesday notice, the Treasury's Financial Crimes Enforcement Network and Office of Foreign Assets Control issued a joint proposed rule to implement provisions of the GENIUS Act, which was signed into law in July 2025. The proposal would require payment stablecoin issuers to establish and maintain an anti-money laundering and countering the financing of terrorism program, maintain a sanctions compliance program, and have the ability to block, freeze and reject certain stablecoin transactions. Issuers would be treated as financial institutions under the Bank Secrecy Act. Basically, the regulatory equivalent of being told to clean your room, do your homework, and hand over your phone—all at once.

"Bringing stablecoin issuers into full BSA/OFAC compliance effectively turns them into bank-like gatekeepers," Snir Levi, CEO of blockchain intelligence firm Nominis, told Cointelegraph. "That means significantly more wallet freezes, transaction blocking and asset seizures at scale." Translation: your favorite DeFi playground just got a bouncer who actually checks IDs and has the power to kick you out permanently.

The Treasury's notice is part of the GENIUS Act implementation, the stablecoin payments bill signed into law by US President Donald Trump last year. The legislation provides a framework for stablecoin issuers and is expected to be a boon for crypto markets. It will be effective 18 months after it was signed in July or 120 days after federal authorities issue related regulations. So circle roughly Q1 2027 on your calendar, set a reminder, and maybe start practicing your "yes sir, I'm compliant" face in the mirror.

On Tuesday, the Federal Deposit Insurance Corporation issued its own proposed rule as part of the GENIUS Act implementation. The FDIC said stablecoin holders would not be insured under the bill, though reserve deposits for issuers would receive protection. Your USDT isn't getting a safety net, but the issuers' rainy day fund? Oh, they're covered. Classic "we're from the government and we're here to help" energy.

Meanwhile, Congress remains stalled on progress for a bill to establish a digital asset market framework called the CLARITY Act, which passed the House of Representatives last year. With the Senate Banking Committee yet to schedule a markup on the bill, crypto and banking representatives have been meeting with White House officials to discuss issues related to stablecoin yield, tokenized equities and ethics. The CLARITY Act is basically in regulatory purgatory, waiting for someone in the Senate to give a damn. The White House's Council of Economic Advisers said on Wednesday that a ban on stablecoin yield in the bill "would do very little to protect bank lending," claiming it would impose costs on users. As of Wednesday, the banking committee had not rescheduled a markup on the CLARITY Act. So for now, everyone just keeps meeting, talking, and absolutely nothing gets decided. Classic Washington theater, folks.