The U.S. government is moving to comprehensively regulate stablecoins, primarily through the implementation of the GENIUS Act passed in July 2025. The Treasury Department, via FinCEN and OFAC, has proposed rules requiring permitted payment stablecoin issuers (PPSIs) to comply with Bank Secrecy Act (BSA) and sanctions regulations, effectively classifying them as financial institutions. This includes establishing robust AML/CFT programs, conducting risk assessments, filing Suspicious Activity Reports (SARs), and implementing technical capabilities to block or freeze transactions violating laws or orders. The FDIC is also proposing rules for stablecoin issuers operating through the banking system, focusing on reserve standards, redemption processes, and risk management, though deposit insurance won't extend to stablecoin holders themselves. A key aspect is the mandate for issuers to maintain 'kill switches' to halt suspicious on-chain flows. Simultaneously, Bitcoin is exhibiting a 60% correlation with gold, suggesting a shift towards being viewed as a macro hedge amid geopolitical uncertainty, particularly related to the U.S.-Iran conflict, leading to significant liquidations in the crypto market.
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