According to Coinfomania on May 25, the latest proposed rule from the Federal Deposit Insurance Corporation (FDIC) would require licensed payment stablecoin issuers (PPSIs) regulated by the FDIC to establish a comprehensive anti-money laundering/anti-terrorist financing (AML/CFT) framework based on the Bank Secrecy Act (BSA) and the sanctions compliance standards of the Office of Foreign Assets Control (OFAC); the public comment deadline is June 9.
Confirmed compliance requirements list under the FDIC proposed rule
Under the FDIC proposed rule, regulated PPSIs must establish the following compliance infrastructure:
AML/CFT program: Includes transaction monitoring systems and reporting obligations consistent with the Bank Secrecy Act
OFAC sanctions compliance: Establish and maintain effective sanctions screening procedures
Customer Identification Program (CIP) and due diligence (CDD): Equivalent to traditional bank standards
Suspicious activity reporting: File relevant reports with FinCEN
Technical capabilities: Have the technical ability to screen, freeze, and refuse certain or illegal transactions
Annual certification report: Submit compliance certifications to regulators
Prohibition on interest/earnings: The proposal generally prohibits paying interest or earnings on issued stablecoins
Key differences between the GENIUS Act and the CLARITY Act
There is widespread confusion in the market about the two bills. The following is the confirmed current status:
GENIUS Act (the “Stablecoin National Innovation Guidance Act”): Signed into law on July 18, 2025; focuses on the federal regulatory framework for payment stablecoins; FDIC, FinCEN, and OFAC are completing the implementing rules before the July 2026 deadline.
CLARITY Act (the “Digital Asset Market Clarity Act”): Still under full Senate consideration in the United States (the Senate Banking Committee passed it on May 14, 2026 by a vote of 15:9); focuses on a broader digital asset market structure (SEC/CFTC jurisdictional boundaries, DeFi rules, etc.); if it is not passed by a full vote before the congressional recess in August 2026, lawmakers warn it could be pushed to 2030.
FAQ
What are the recognition standards for a “licensed payment stablecoin issuer” (PPSI) under the GENIUS Act?
A PPSI as defined by the GENIUS Act refers to a payment stablecoin issuer that applies for and is granted a license under a federal or state-approved regulatory framework. At the federal level, a PPSI can be a subsidiary of a national bank (regulated by the OCC), a subsidiary of a federally chartered member bank (regulated by the Fed), or a subsidiary of a insured non-member bank and a state savings association (regulated by the FDIC). Non-bank state chartered entities may also apply for PPSI eligibility if they meet equivalent standards. The GENIUS Act explicitly treats PPSIs as “financial institutions” under the Bank Secrecy Act, which is the legal basis for incorporating them into the bank-level AML compliance framework.
Why is FinCEN’s regulatory role under the GENIUS Act more prominent than the FDIC’s role in traditional bank regulation?
In traditional bank regulation, the FDIC typically serves as both the prudential regulator and the BSA enforcement authority, examining the AML compliance of the institutions it oversees. But the GENIUS Act is designed with different division of responsibilities: the FDIC is responsible for prudential requirements (reserves, capital, redemptions), while the primary enforcement role under BSA oversight is handed to the Treasury Department through FinCEN, which represents an important departure from the traditional bank regulatory framework. The FDIC’s latest proposal achieves a unified compliance system through cross-referencing FinCEN requirements (rather than creating them independently), reflecting the GENIUS Act’s intent to establish a three-party coordination model for stablecoin regulation distinct from traditional banking (FinCEN + OFAC + the primary federal regulator).
How does the rule on “prohibiting payment of stablecoin interest or earnings” affect yield-bearing stablecoins in DeFi?
The GENIUS Act’s prohibition on interest/earnings primarily targets regulated PPSIs that directly pay interest to holders on the payment stablecoins they issue. The design logic of this provision is to distinguish payment stablecoins from “deposits” (bank accounts), avoiding having stablecoins legally treated as deposits (which would require FDIC deposit insurance). For yield-bearing stablecoins in DeFi (such as profits earned through lending agreements or liquidity mining), the regulatory classification is still unclear. If these mechanisms enable stablecoin holders to receive earnings in the form of stablecoins themselves, it could fall within the compliance boundaries of the GENIUS Act. The CLARITY Act has a more direct regulatory intent for these DeFi boundary issues, but the bill is still in the legislative process.
