Banking Groups Push for Stablecoin AML Oversight in Secondary Markets
- The Bank Policy Institute and The Clearing House advocate for anti-money laundering (AML) rules to extend beyond initial issuance of stablecoins.
- Regulators are urged to focus on high-risk activities rather than “check-the-box compliance” methods.
- Current AML gaps in the secondary market should be addressed without holding issuers accountable for transactions they cannot control.
- Most illicit finance involving payment stablecoins occurs in secondary markets, according to the Financial Crimes Enforcement Network and the Office of Foreign Assets Control.
- The GENIUS Act allows permitted payment stablecoin issuers to operate under U.S. regulations.
Banking trade groups are pressing for clearer oversight of stablecoin transactions after issuance, emphasizing that most illicit activities occur in secondary markets where issuers have limited control over transactions.
By addressing these regulatory gaps, the aim is to enhance trust and institutional participation in stablecoin markets while ensuring compliance with existing financial regulations. (Source)
