OCC Proposes Applying Bank Secrecy Act to Stablecoin Issuers

WASHINGTON — The Office of the Comptroller of the Currency on June 22 issued a proposed rule that would require federally supervised stablecoin issuers to comply with the Bank Secrecy Act and other anti-money laundering regulations, marking a significant step in bringing digital asset providers under a regulatory framework comparable to traditional banks.

The proposed rulemaking seeks to implement standards mandated by the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. Under the proposal, permitted payment stablecoin issuers (PPSIs) under the OCC’s jurisdiction would be subject to the same anti-money laundering and countering the financing of terrorism (AML/CFT) program requirements, sanctions programs, and reporting rules that apply to banks and credit unions.

This move is part of a coordinated effort by U.S. financial regulators to establish comprehensive oversight for the stablecoin sector. The OCC’s announcement was made in conjunction with the Federal Reserve Board, the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), and the Treasury Department’s Financial Crimes Enforcement Network (FinCEN).

The rule would specifically require OCC-supervised issuers to adhere to regulations from both FinCEN and the Office of Foreign Assets Control (OFAC). According to a statement from the Federal Reserve, the proposal would introduce requirements for these issuers that are “comparable to customer identification program requirements for banks and credit unions.”

The entities directly affected by the proposal include a range of institutions under OCC authority. These are federal qualified payment stablecoin issuers, state-qualified payment stablecoin issuers over which the OCC has regulatory or enforcement authority, and subsidiaries of national banks or Federal savings associations. The scope also extends to certain foreign payment stablecoin issuers.

Beyond establishing compliance programs, the proposed rule details a new framework for supervision and enforcement. It mandates a process for consultation between the OCC and FinCEN before the OCC can initiate a significant AML/CFT enforcement or supervisory action. This ensures alignment between the primary banking regulator and the nation’s financial intelligence unit. The rule also includes a provision allowing PPSIs to share certain nonpublic information from the OCC with FinCEN related to potential enforcement actions.

For stablecoin issuers that successfully establish and maintain effective AML/CFT programs, the rule provides a safe harbor against certain civil enforcement and significant supervisory actions, a feature similar to one proposed for banks in April.

The reporting and examination requirements outlined in the proposal are substantial and, in some cases, more frequent than those for traditional banks. Issuers would be required to submit a weekly confidential report to the OCC detailing issuance and redemption activity, trading volume, and the status of their reserve assets. Additionally, they would have to file a quarterly public report akin to a bank's Call Report and provide other financial and compliance data upon request.

The OCC also asserted its authority to conduct examinations as frequently as it deems necessary and stated it would view its access to an issuer's books and records as unhindered, even for documents over which an issuer might claim privilege. This sets up a dynamic similar to the one banks currently navigate with their federal regulators.

Significantly, the proposal under the GENIUS Act grants the OCC emergency enforcement authority over state-regulated non-bank issuers. If the OCC believes a state-licensed issuer's actions or inactions pose a “serious risk to the financial safety, soundness, or stability of the issuer,” it can impose a directive. This creates a new supervisory relationship between the OCC and state regulators, particularly in jurisdictions like New York and Wyoming that have established their own digital asset frameworks.

Industry groups have already begun to weigh in. The American Bankers Association previously expressed concerns about the broader FinCEN and OFAC framework that the OCC’s rule would adopt. In a letter to the agencies, the ABA argued that any AML/CFT rules must explicitly cover secondary market activities, such as when individuals purchase stablecoins from an intermediary rather than directly from the issuer. “Without greater clarity around the obligations of secondary market actors, regulated financial institutions will face challenges in assessing and managing the risks associated with payment stablecoins,” the ABA stated.

In our experience, regulatory uncertainty is often a bigger barrier to innovation than the cost of compliance itself. This proposal, while stringent, starts to draw the map for how stablecoins can operate within the U.S. financial system, not outside of it. For small and mid-sized companies looking to leverage stablecoins for payments or treasury management, this is a critical development. The compliance requirements will be substantial, mirroring those of traditional banks, which can be daunting for smaller issuers or businesses integrating these assets. Understanding and implementing robust AML/CFT programs is no longer optional. This is precisely the kind of challenge where expert guidance is crucial. Our financial risk management practice at C&S Finance Group LLC helps clients design and implement compliance frameworks that meet these new federal standards, ensuring they can innovate without running afoul of regulators. To discuss how to prepare your business, visit us at csfinancegroup.com.

The OCC has opened a 30-day public comment period for the proposed rule following its publication in the Federal Register. Industry participants and financial institutions will be closely watching how the agency incorporates feedback, especially regarding the scope of liability for secondary market participants, before a final rule is issued. The ongoing implementation of the GENIUS Act framework will remain a central focus for the digital asset industry and its regulators.