Why are US banks pushing for broader stablecoin AML rules?

The Bank Policy Institute and The Clearing House argue that most illicit stablecoin activity occurs after tokens enter circulation. They want regulators to focus more on secondary market transactions rather than placing most compliance obligations on issuers.

What are secondary markets for stablecoins?

Secondary markets refer to transactions that occur after a stablecoin has been issued, including transfers on exchanges, DeFi platforms and between private wallets. This is where banking groups say much of the anti-money laundering risk exists.

What are the Bank Policy Institute and The Clearing House asking regulators to do?

The groups want regulators to impose clearer compliance obligations on crypto exchanges, digital asset custodians and decentralised finance platforms. They argue these entities are often better positioned to monitor secondary market activity than issuers.

Why do banks believe stablecoin issuers should not be the only focus?

According to the banking groups, issuers may have limited visibility into transactions once stablecoins leave their platforms and begin circulating across the broader crypto ecosystem. They argue effective oversight requires monitoring activity beyond issuance.

Why are crypto firms opposing broader AML requirements?

Crypto firms such as Paradigm and the Hyperliquid Policy Center argue that stablecoin issuers should not be held responsible for transactions they cannot control. They warn that overly broad rules could discourage regulated stablecoin activity within DeFi.

What is the main disagreement between banks and crypto companies?

The debate centres on who should be responsible for monitoring stablecoin activity after issuance. Banks want more oversight of secondary markets, while many crypto firms argue responsibility should not be assigned to entities that lack direct control over transactions.

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Banks push stablecoin rules beyond issuers

Written by Jon CuthbertPublished Jun 12, 2026, 3:51 AM

The Bank Policy Institute and The Clearing House have urged US regulators to expand anti-money laundering oversight of stablecoins beyond issuers and focus more closely on activity in secondary markets.

The banking groups argued in joint comment letters that current rules place insufficient obligations on decentralised finance platforms, digital asset custodians and crypto exchanges where much of the activity occurs after stablecoins are issued.

“The majority of illicit finance involving payment stablecoins occurs on the secondary market,”

The Bank Policy Institute and The Clearing House said in their submission to regulators.

The comments come after crypto firms including Paradigm and the Hyperliquid Policy Center warned that broad AML requirements could push regulated dollar-backed stablecoins out of the decentralised finance sector by holding issuers responsible for transactions they cannot control.

Industry participants remain divided on the issue, with dYdX Foundation chief executive Charles d’Haussy arguing that major stablecoin issuers already operate compliance tools including freeze functions, blacklist controls and on-chain transaction monitoring.

“What is missing from both submissions is a basic technical fact: AML monitoring in stablecoins does not stop at issuance,”

Said dYdX Foundation chief executive, Charles d’Haussy.

Analysts said broader oversight could help bridge the gap between traditional finance and crypto markets by improving compliance standards, strengthening investor confidence and supporting greater institutional participation in the stablecoin ecosystem.

At the time of reporting, Hyperliquid price was $59.05.

Banks push stablecoin rules beyond issuers

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