Governments are quietly building a global stablecoin firewall

Regulators from Washington, London, Brussels, and Hong Kong are finalizing a new set of rules that grant them the authority to identify, freeze, and in some scenarios redirect cross-border stablecoin transfers. Stablecoins, which used to be hard to control, are now slowly being subjected to the same regulations that apply to traditional banks.

The change affects anyone engaged in cross-border transactions using tokens pegged to the dollar or pound sterling, including those sending remittances and companies’ treasury departments. Stablecoins can move rapidly on the blockchain, but the entrance and exit points of their users create opportunities for regulatory oversight and intervention. This is particularly significant as some key jurisdictions have now concrete rules just months after consultations ended.

Treasury wants to know who is sending what

The U.S. Treasury gave the clearest signal by proposing regulations for the implementation of the illicit-finance provisions of the GENIUS Act, which is the federal stablecoin law. The proposal, which was submitted through the Financial Crimes Enforcement Network, aims to make intermediaries and issuers traceable and not anonymous.

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