The US Treasury Department has requested public input on preventing illegal activities related to cryptocurrencies as part of the GENIUS (Guiding and Establishing National Innovation for US Stablecoins) Act, which was signed into law by President Donald Trump last month.
In its announcement today, the Ministry requested comment on “innovative methods” that financial institutions could use to detect illicit activities related to digital assets, such as money laundering. These areas of inquiry include API integrations, artificial intelligence, digital identity verification, and the use of blockchain technology.
US Treasury Secretary Scott Bessent said the following in a statement on X:
“Stablecoins will increase access to dollars for billions of people and increase demand for the US Treasury bonds that back stablecoins. This is a triple win for stablecoin users, issuers, and the US Treasury.”
The law, which went into effect in July, establishes a federal regulatory framework for stablecoins. It states:
- Stablecoins are required to be fully backed by US dollars or similar liquid assets.
- Annual audits are required for issuers with a market capitalization of over $50 billion.
- Certain guidelines are defined for stablecoins issued abroad.
The law also requires the Treasury to collect public feedback to identify existing or potential innovative methods for financial institutions to detect illicit activity related to digital assets. The collected data will then be presented to the Senate Banking Committee and the House Financial Services Committee, a process that could pave the way for new regulations. The comment period closes on October 17.
This is not investment advice.