SIFMA Submits Recommendations on GENIUS Act AML/CFT and Sanctions Rules for Payment Stablecoin Issuers
Washington, D.C., June 10, 2026 – SIFMA and SIFMA AMG today submitted a letter responding to the Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC) on their proposed anti-money laundering/countering the financing of terrorism (AML/CFT) and sanctions compliance rules for permitted payment stablecoin issuers (PPSIs) under the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act.
SIFMA supports a rigorous, practical, and risk-calibrated AML/CFT and sanctions compliance framework for PPSIs that protects the integrity of the U.S. financial system, promotes responsible innovation in payment stablecoin markets, and directs compliance resources toward the customers and activities that present the greatest illicit finance and sanctions risks.
SIFMA’s members expect to engage with payment stablecoins in multiple capacities, including as issuers, custodians, reserve asset managers, counterparties of PPSIs in short-term Treasury and repurchase markets, operators of institutional custody infrastructure, and providers of securities-related services in connection with stablecoin-related activities. SIFMA believes certain elements of the proposal should be clarified to ensure it is operationally workable and accounts for the distinct roles, operational capabilities, and risk profiles that PPSIs have in the payment stablecoin ecosystem.
In addition, because the U.S. legal and regulatory framework for digital assets and the underlying technology and markets are continuing to evolve, FinCEN and OFAC should commit to providing updated guidance and clarifications on a periodic basis to reflect legal, regulatory, and market changes.
“SIFMA supports responsible innovation in payment stablecoin markets, and a clear, risk-based AML and sanctions framework will be critical for those markets to grow with integrity,” said Peter Ryan, SIFMA managing director, head of digital assets and international prudential policy. “Our recommendations are designed to strengthen compliance, promote consistent supervision, reduce unnecessary duplication, and better align responsibilities with the entities best positioned to identify and mitigate risk. We appreciate the opportunity to engage with FinCEN, OFAC, and other regulators on the development of this framework.”
SIFMA’s letter makes four recommendations:
Secondary market obligations: The agencies should clarify when and how issuers are expected to block, freeze, reject, or otherwise prevent payment stablecoin transfers, particularly in secondary markets, where a PPSI may lack a direct relationship with the parties, visibility into wallet holders, or a lawful order or sanctions nexus to act on. The final rule should preserve flexibility for PPSIs to use different technologies and controls; recognize the practical limits of the relevant ledger, smart contract, and wallet structures; and clarify how responsibility should be allocated where other ecosystem participants, including digital asset service providers (DASPs), have greater user visibility. The agencies should also confirm that blocking or freezing applies to the relevant payment stablecoins or transaction, not reserve assets; absent such clarity, PPSIs may be subject to inconsistent or technically infeasible obligations where they lack sufficient visibility into the transacting parties.
Safe harbor: SIFMA recommends extending protections to PPSIs that are comparable to those other financial institutions already have for reasonable, good-faith actions to block, freeze, reject, delay, or restrict transactions. U.S. Treasury should also work with Congress to enact legislation – such as proposed Section 305 of the CLARITY Act – to ensure that safe harbor protections cover the full range of good-faith actions issuers may take based on reasonably available information.
Scope of program requirements: The agencies should the same risk-based program standards used across financial institutions, consistent with FinCEN’s proposed AML program rule, without heightened or bespoke obligations on issuers. Because issuers will themselves be regulated financial institutions subject to AML/CFT program obligations, they should be excluded from the “legal entity customer” definition under FinCEN’s customer due diligence rule.
Travel Rule: SIFMA recommends that the agencies provide further guidance on Travel Rule obligations for payment stablecoin activity and recognize reasonable, risk-based reliance on appropriately designed, industry-developed solutions and standards as an acceptable means of compliance.
The letter is available at the following link: https://www.sifma.org/advocacy/letters/fincen-and-ofac-joint-proposed-rulemaking-on-ppsi-aml-cft-program-and-sanctions-compliance-program-requirements
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SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s one million employees, we advocate on legislation, regulation and business policy affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA).