OCC Proposes AML/CFT Supervision Framework for Stablecoin Issuers It Supervises Under the GENIUS Act

The Office of the Comptroller of the Currency (“OCC”) has issued a notice of proposed rulemaking establishing an anti-money laundering, countering the financing of terrorism (“AML/CFT”), and sanctions supervision framework for OCC-supervised permitted payment stablecoin issuers (“PPSIs”).

While the proposal has generated significant attention, it is important to recognize that the GENIUS Act itself, enacted in July 2025, already brought PPSIs within the scope of the Bank Secrecy Act (“BSA”) and required stablecoin issuers to maintain AML/CFT and sanctions compliance programs. The OCC's proposal does not create those underlying obligations. Instead, it provides the supervisory and enforcement framework through which the OCC will oversee compliance for issuers under its jurisdiction.

What the Proposal Does

The proposed rule would require OCC-supervised PPSIs to comply with the BSA, applicable provisions of the GENIUS Act, and regulations issued by the Financial Crimes Enforcement Network ("FinCEN") and the Office of Foreign Assets Control ("OFAC"), including AML/CFT program, sanctions, and reporting requirements.

More significantly, the proposal would:

• Establish the OCC as the primary AML/CFT examiner and enforcement authority for OCC-supervised PPSIs.
• Create a formal supervision and enforcement framework for evaluating PPSI AML/CFT and sanctions compliance programs.
• Require consultation and coordination between the OCC and FinCEN when the OCC intends to initiate significant AML/CFT supervisory or enforcement actions.
• Permit PPSIs to share certain nonpublic OCC information with FinCEN relating to existing or potential AML/CFT supervisory and enforcement matters.

Comments on the proposal will be accepted for 30 days following publication in the Federal Register.

Part of a Broader GENIUS Act Implementation Effort

The OCC proposal is best understood as one component of a broader regulatory effort to implement the GENIUS Act. The OCC itself proposed its comprehensive GENIUS Act framework in March 2026, covering licensing, reserves, capital, and supervision, and noted at the time that AML/CFT and sanctions requirements would be addressed separately. This proposal is that companion rulemaking.

The substantive core of the framework arrived in April. On April 8, 2026, FinCEN and OFAC jointly proposed the program standards that define what a PPSI compliance program must actually contain, including documented risk assessment processes, ongoing customer due diligence, independent testing, employee training, and a designated AML/CFT officer located in the United States. That proposal also marks the first time a category of U.S. persons would be required by regulation, rather than by guidance, to maintain an effective sanctions compliance program. The comment period on that rule closed June 9, 2026.

In June 2026, the Federal Reserve, OCC, FDIC, NCUA, and FinCEN jointly issued a separate notice of proposed rulemaking that would impose customer identification program (“CIP”) requirements on stablecoin issuers comparable to those applicable to banks and credit unions. That proposal establishes substantive customer onboarding and identification requirements for PPSIs.

The OCC proposal builds on those requirements by creating the supervisory layer through which the OCC will examine, monitor, and enforce compliance for issuers it regulates.

Taken together, these developments illustrate how federal regulators are operationalizing the GENIUS Act. The statute itself pulled permitted payment stablecoin issuers squarely within the BSA framework and introduced explicit sanctions compliance obligations. The 2026 rulemakings now provide the implementation mechanisms: FinCEN and OFAC program standards, joint agency CIP requirements, and an OCC supervision and enforcement framework.

Why It Matters

For stablecoin issuers, fintechs, digital asset firms, and financial institutions supporting stablecoin activities, the message from regulators is increasingly clear: compliance expectations for payment stablecoins will resemble those applied to traditional financial institutions.

Organizations should evaluate whether their compliance programs are prepared for direct supervision and examination by a federal banking regulator. Areas likely to receive heightened scrutiny include AML/CFT governance, sanctions compliance, customer identification and due diligence processes, transaction monitoring, suspicious activity reporting, independent testing, and board and management oversight.

Two features of the proposals deserve particular attention. The FinCEN and OFAC proposal draws a sharp line between primary market activity, where most AML/CFT obligations attach, and secondary market transfers, which are subject principally to technical capabilities to block, freeze, and reject impermissible transactions. Issuers would also be required to designate an AML/CFT officer located in the United States and accessible to regulators, a structural decision some organizations will need to confront well before final rules take effect.

As the regulatory framework continues to develop, firms should expect increasing alignment between stablecoin compliance expectations and the standards long applied to banks and other regulated financial institutions.

Bates Group's Fintech and Banking Compliance practice assists banks, fintechs, money services businesses, and digital asset firms with the design, enhancement, testing, and remediation of AML/CFT, sanctions, and compliance management programs.

Our team supports clients with BSA/AML/OFAC program development, risk assessments, independent reviews, customer identification and due diligence programs, transaction monitoring and sanctions screening optimization, regulatory examination preparedness, and remediation initiatives arising from supervisory findings.

To discuss how the OCC's proposed rule and broader GENIUS Act implementation efforts may affect your organization, please contact Bates Group today.