The American Bankers Association supports requiring stablecoin issuers to comply with the Bank Secrecy Act and sanctions requirements, but proposed rulemaking to establish those standards needs further refinements, ABA said in a letter to the FDIC.
The FDIC has advanced proposed rules to establish a regulatory framework for payment stablecoins, as required under the Genius Act. Among the rules is a proposal to require issuers regulated by the agency to comply with BSA and compliance standards proposed by the Financial Crimes Enforcement Network and the Office of Foreign Assets Control. The Office of the Comptroller of the Currency has put forward a similar proposal.
In its comments, ABA said the FinCEN/OFAC framework appropriately treats issuers as financial institutions for BSA purposes and aligns sanctions compliance with other regulated entities. Still, ABA has raised concerns that the proposals do not adequately address the financial crime risks posed by secondary market payment stablecoin activities. It has asked for the following revisions:
- The agencies should adopt an examination framework under which all three categories of issuers are not only subject to equivalent Bank Security Act regulation, but examined for AML/CFT and sanctions compliance by the same federal banking agencies.
- FinCEN should apply the “deemed compliance” logic to the stablecoin issuer subsidiaries of insured depository institutions, allowing them to rely on their parent bank’s enterprise-wide AML/CFT program.
- The final rule should expressly confirm that it imposes obligations solely on stablecoin issuers and does not reach reserve custodian banks or other financial institutions providing services to those issuers.
- The agencies should define key terms – including “block,” “freeze,” “burn,” “reject,” “seize,” and “wallet” (or “wallet address”) – and ensure they are congruent with terms in existing OFAC regulations.
“ABA supports FDIC’s and OCC’s adoption of FinCEN and OFAC’s proposed regulatory framework for [stablecoin issuers] to satisfy their respective obligations to implement BSA and sanctions compliance standards under the Genius Act, provided ABA’s recommendations are adopted by FinCEN and OFAC,” the association said.
