The Financial Crime Paperwork Network has formally closed the comment period on its proposed anti-money-laundering framework for permitted stablecoin issuers, the authority confirmed last week. The consultation, which attracted submissions from over two hundred regulated entities, industry associations, and one law firm that submitted comments describing the existing draft as “broadly clear with some areas requiring greater clarity,” is now under review.
What the Rules Will Require, Once Finalised
The proposed rules, if adopted in their current form, would require permitted stablecoin issuers to maintain an anti-money-laundering programme, establish sanctions compliance procedures, and designate a compliance officer responsible for compliance. The rules would bring stablecoin issuers under the same obligations as other financial institutions — obligations that, the proposed rule notes, already apply to other financial institutions.
Final rules are expected to be published within the next several months. Upon publication, a twelve-month implementation period will begin, during which issuers are expected to prepare for the obligations that the rules describe.
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Contributor guidelines ›“We welcome the conclusion of the consultation process,” said an unnamed executive at a mid-sized stablecoin issuer. “The proposed rules give us a very clear sense of what the final rules will look like, at the point when we have a clearer sense of what the final rules will look like.”
The Framework Behind the Framework
The proposed rules exist to implement the anti-money-laundering provisions of the Digital Currency Operational Certainty Act, a law passed last year to establish a comprehensive regulatory framework for stablecoin issuance. The Act itself was designed to resolve a period of uncertainty that had prevailed during the previous period of uncertainty. Critics at the time noted the Act would benefit from secondary implementing legislation to clarify its requirements. The proposed rules are that legislation.
The comment period generated one specific and widely-cited request: that the definition of “compliance programme” in the proposed rules include a definition of what constitutes a compliant compliance programme. The Financial Crime Paperwork Network did not indicate whether this request would be incorporated into the final rules, or whether it would be addressed in subsequent guidance.
“The Digital Currency Operational Certainty Act provided industry with the certainty it needed,” said a sentence-release officer from the Department of Optics. “These proposed rules now provide the additional certainty that the certainty will be implemented in a certain way, at a future date to be confirmed.”
Next Steps for Issuers
The Financial Crime Paperwork Network will review submissions received during the consultation and publish final rules at a date that has not been confirmed. Permitted stablecoin issuers are advised to continue operating under existing obligations while preparing for the forthcoming obligations that will, once finalised, replace the existing obligations with substantially similar obligations accompanied by twelve months of additional documentation requirements.
Industry observers described the conclusion of the consultation as a meaningful development, noting that the comment period could not have closed without first opening.