The US Treasury Department's Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) have developed a draft rule that will require issuers of authorized payment stablecoins (PPSI) to combat money laundering and sanctions evasion. The draft was published on the US Treasury Department's website, along with the department's comments.

The rule will require PPSI to block, freeze, and reject suspicious transfers. FinCEN expects stablecoin issuers' programs to be able to stop suspicious transactions and identify which categories of customers and transactions require special attention.

The draft also notes that issuers will be required to cooperate with the agency in pursuing entities identified as "primary sources of money laundering risk." In cases where US authorities target a specific threat (person or entity) related to money laundering or sanctions evasion, issuers subject to the rule will be required to review their records of transactions related to these individuals or entities.

The US Treasury Department states that the proposed rule encourages innovation in payment stablecoins while mitigating potential risks of illicit financing. Previously, the Financial Action Task Force (FATF) noted in its report that stablecoins are increasingly being used to commit financial crimes, including sanctions evasion, money laundering, and terrorist financing.