Federal Deposit Insurance Corporation proposes anti-money laundering and sanctions standards for FDIC-supervised payment stablecoin issuers

The Federal Deposit Insurance Corporation has approved a notice of proposed rulemaking to implement Bank Secrecy Act and sanctions compliance standards for FDIC-supervised permitted payment stablecoin issuers under the GENIUS Act. The proposal would require those issuers to comply with applicable anti-money laundering and countering the financing of terrorism, economic sanctions, reporting and customer identification obligations, and would create an FDIC supervision and enforcement framework for their AML/CFT programs. The affected firms are permitted payment stablecoin issuers that are subsidiaries of insured state nonmember banks and state savings associations approved by the FDIC to issue payment stablecoins. The rule would amend part 350 to add a PPSI-specific BSA and sanctions provision and a new subpart covering definitions, supervisory policy, FinCEN consultation and information sharing. Under the proposed approach, a PPSI that has established an effective AML/CFT program would generally not face an AML/CFT enforcement action or significant supervisory action based on FinCEN program requirements unless there is a significant or systemic failure, while failures to establish an effective program would remain actionable. Before initiating an AML/CFT enforcement action or significant supervisory action, the FDIC would give the Director of the Financial Crimes Enforcement Network at least 30 days' notice and relevant information unless a shorter period is needed to address an unsafe or unsound practice or condition. The agency is also seeking comment on two options for allowing PPSIs to share FDIC non-public supervisory information with FinCEN in this context while preserving applicable privileges. Comments will be accepted for 60 days after publication in the Federal Register.