US Banking Groups Urge Stablecoin AML Rules Be Extended to Secondary Markets

Major US banking groups are urging regulators to expand anti-money-laundering rules for stablecoins to cover secondary-market activity. The push comes as traditional finance and the crypto industry intensify their battle over the direction of US digital-asset policy.

Decrypt reported on June 11 that the Bank Policy Institute and The Clearing House submitted a joint comment letter to the Financial Crimes Enforcement Network and the Office of Foreign Assets Control, both part of the US Treasury Department.

The groups wrote that most illicit finance involving stablecoins occurs in secondary markets after tokens leave the issuer.

They also argued that the current regulatory framework does not impose adequate obligations on DeFi protocols, some digital-asset custodians and exchanges.

The letter urged regulators to move beyond a formal compliance approach centered only on issuance and instead focus on closing regulatory gaps in secondary markets.

Crypto industry groups including Paradigm and the Hyperliquid Policy Center have previously argued that extending AML liability to secondary-market transactions beyond an issuer's control could hinder DeFi innovation.

The split between traditional finance and the digital-asset industry over stablecoin regulation is increasingly being viewed as a key factor in shaping the future direction of US AML policy.