US Treasury Proposes Stablecoin AML Rules Under GENIUS Act as Bessent Pushes Congress on CLARITY Act
FinCEN and OFAC jointly proposed anti-money laundering and sanctions compliance rules for stablecoin issuers on April 8, while Treasury Secretary Scott Bessent urged Congress to advance the CLARITY Act to complete the federal digital asset regulatory framework.
Overview
The US Treasury Department moved to implement a key provision of the nation’s first stablecoin law on April 8, as the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) jointly proposed anti-money laundering and sanctions compliance rules for permitted payment stablecoin issuers. The rulemaking follows the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, which President Trump signed into law on July 18, 2025.
The same week, Treasury Secretary Scott Bessent pressed Congress to pass the CLARITY Act, a market structure bill that would establish formal jurisdiction over digital assets between the Securities and Exchange Commission and the Commodity Futures Trading Commission. Together, the two legislative efforts represent the most comprehensive attempt to regulate digital assets at the federal level in US history.
The Proposed Stablecoin Rules
The joint notice of proposed rulemaking would classify permitted payment stablecoin issuers (PPSIs) as financial institutions under the Bank Secrecy Act. Under the proposal, issuers would be required to implement comprehensive anti-money laundering programs tailored to their operations, establish sanctions compliance programs, and deploy controls for identifying and mitigating risks related to money laundering, terrorist financing, and sanctions evasion.
Issuers would also be required to report suspicious activity and retain the authority to refuse, block, or freeze transactions linked to illicit actors. Treasury Secretary Bessent stated that the proposal would “protect the US financial system from national security threats”.
The obligations are described as “tailored and fit for purpose,” accounting for differences in issuer size and operational complexity. The proposed rule will be published in the Federal Register, opening a public comment period for stablecoin issuers, industry groups, and consumer advocates.
The CLARITY Act and Market Structure
While the GENIUS Act addressed stablecoins, the broader question of how to regulate the rest of the digital asset market remains unresolved. The CLARITY Act, which passed the House 294-134 in July 2025, has been stalled in the Senate for months. Its core objective is to divide regulatory oversight of digital assets between the SEC and the CFTC, defining which tokens constitute securities and which are commodities.
Bessent argued in a Wall Street Journal opinion piece that the CLARITY Act is the logical next step to build on the GENIUS Act’s stablecoin framework, describing it as a matter of national security. Coinbase CEO Brian Armstrong, who had previously stated the company would prefer no legislation to a flawed bill, reversed his position and publicly backed the legislation following Bessent’s push.
The SEC and CFTC signed a memorandum of understanding in March 2026 to coordinate on shared regulatory concerns, signaling institutional readiness for the framework. A Senate Banking Committee hearing on the bill is expected in the latter half of April, after Easter recess ends on April 13.
The Stablecoin Yield Dispute
A central point of contention that delayed the CLARITY Act was the question of stablecoin yields. The GENIUS Act barred stablecoin issuers from paying interest directly, but the CLARITY Act intersects with this provision regarding whether third-party platforms can offer yield tied to stablecoin holdings.
A compromise reached by Senators Angela Alsobrooks and Thom Tillis in March would allow rewards programs on users’ stablecoin activities but not on balances. A White House Council of Economic Advisers report argued that banning such rewards would increase traditional lending by only 0.02 percent, though banking trade groups have projected larger deposit losses. The resolution of this dispute cleared a path for the bill to advance.
What Comes Next
The FDIC and OCC have already aligned on a prudential framework for FDIC-supervised stablecoin issuers under the GENIUS Act, and the OCC’s final rule authorizing national trust banks to engage in digital asset custody took effect on April 1. The Treasury’s proposed stablecoin AML rules will undergo a public comment period before finalization.
For the CLARITY Act, the coming weeks are pivotal. If the bill clears the Senate Banking Committee and passes both chambers, it would establish the first comprehensive federal market structure framework for digital assets. However, analysts remain divided on its prospects, with some industry observers placing the likelihood of passage this year at roughly 30 percent given the compressed legislative calendar.