An issuer is treated as a financial institution under the Bank Secrecy Act
What the document says“A permitted payment stablecoin issuer shall be treated as a financial institution for purposes of the Bank Secrecy Act, and as such, shall be subject to all Federal laws applicable to a financial institution located in the United States relating to economic sanctions, prevention of money laundering, customer identification, and due diligence”
Subsection (a)(5)(A). Six things follow from the treatment: an effective anti-money laundering program with risk assessments and a designated officer, retention of appropriate records, monitoring and reporting of suspicious transactions, technical capabilities and procedures to block, freeze and reject impermissible transactions, an effective customer identification program including enhanced due diligence, and an effective economic sanctions compliance program. The Secretary of the Treasury is to adopt rules tailored to the size and complexity of issuers. Bank Secrecy Act is defined in section 2(2) by reference to three older laws.
What the document actually says“A permitted payment stablecoin issuer shall be treated as a financial institution for purposes of the Bank Secrecy Act, and as such, shall be subject to all Federal laws applicable to a financial institution located in the United States relating to economic sanctions, prevention of money laundering, customer identification, and due diligence”
A coin maker counts as a financial firm under an older law. So the rules that banks follow apply to it. Those rules cover dirty money and blocked countries.
The maker must know who its customers are. It must watch for odd trades and report them. It must be able to freeze coins. It must keep records.
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