Stablecoins aren’t going anywhere, at least not anytime soon.
in Which By the way, stablecoins actually exist in a different niche than other crypto experiences like NFTs and Criminally deficient Exchange platforms. Add to that the fact that they have it now Appropriate legal framework In the United States under which it operates Thanks For the GENIUS Act this summer.
Its stablecoin market grew 42% This year, its value now exceeds $300 billion. Confirming its daily growth, on Thursday (October 9), City projects invested in Stablecoin infrastructure platform BVNK; While earlier on Wednesday (October 8), Bank of North Dakotastate-owned bank, a partner with Flames To launch a stable coin.
Add another exclamation mark to Ascension Of stablecoins, at JPMorgan Chase He claimed That the increasing adoption of tokens could enhance the Demand for the dollar will reach $1.4 trillion by 2027
but There is one correlation that stablecoins still share with the rest of the broader cryptocurrency landscape: persistent correlation tangle In financial fraud and crime. Report from Financial Action Task Force The FATF found that “most illicit on-chain activity now involves stablecoins.”
Against this background, the US Treasury Department has Issue a Request for Comment (RFC) About how to deal with encryption Landscape hazards For regulated financial institutions, particularly under the new GENIUS Act. With a window for responses Close next week (Oct. 17), RFC offers corporate leaders unique insight into how Washington views the limits of cryptocurrency compliance.
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The purpose of requesting input on “innovative ways to detect illicit activity involving digital assets.”“ It is to outline what is technologically and operationally possible today, With a purpose Linking regulation to real-world capabilities and constraints. For compliance officers, CFOs, IT managers, and other leaders, the RFC offers a kind of Rosetta Stone for deciphering where Treasury expects cryptocurrency compliance to go and where vulnerabilities may arise.
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Four focal techniques
The Treasury Department’s RFC is not so much a policy-making tool as it is a research tool designed to get feedback on new uses of the application program Application programming interfaces (APIs), artificial intelligence (AI), digital identity verification, and is used Blockchain technology and monitoring technologies to address stablecoin risks across the financial landscape.
Application programming interfaces (APIs) are the connective tissue through which compliance tools, banks, wallet providers, and regulatory endpoints can exchange data. Treasury He wants Feedback on how to APIs May bond Off-chain systems (banks, exchanges, custodians) with on-chain analytical engines or supervisory dashboards. The RFC asks about throughput, latency, data uniformity, and privacy considerations.
AI is the lens through which vast amounts of transaction data, both on-chain and off-chain, can be examined for patterns, anomalies or hidden networks. Treasury request he asks Specifically on how AI models can flag suspicious behavior, detect structural links across portfolios, or detect illicit flows. It is too Investigations Practical concerns: Model explainability, auditability, robustness to conflicting inputs, bias, and account It costs.
Digital identity verification lies at the core of translating pseudonymous blockchains into accountable financial pathways. RFC calls comment on Know your customer, Digital ID schemes (For example Verifiable credentials, zero-knowledge proofs, decentralized identity), and how identity tools can integrate with transactional logic. The Treasury Department is particularly interested in designs that balance accuracy, anti-fraud strength, privacy protection, and resilience to identity attacks.
Finally, blockchain monitoring and analytics refers to tools that analyze transaction graphs, cluster wallet addresses, and integrate off-chain metadata (For example Exchange wallet scores, sanction lists, and heuristics). The RFC solicits ideas for hybrid systems that combine on-chain observability with off-chain enrichment, and asks whether real-time scanning is possible. It is too Investigations How companies You may be hired Advanced encryption techniques, oracles, and privacy-preserving analytics, or Smart contract auditing.
Read more: 3 Things Businesses Should Know About Brand Release Stablecoins
What the Treasury’s priorities mean
Taken together, Treasury’s RFC provides useful glimpses into how regulators envision the next generation of cryptocurrency compliance.
An official comment submitted by the Federal Financial Services Business Association (FedMSB) suggested three immediate actions.
the Firstly, To standardize evidence exchange via the RegTech Evidence API to share risk data with minimal exposure. The second is to create a “good faith safe harbor” for AI that recognizes systems subject to NIST’s AI Risk Management Framework (RMF). The third is to enable privacy-preserving collaboration using cryptographic techniques (e.g., private group crossing) to share data between organizations.
The FedMSB represents hundreds of regulated financial services companies, companies that sit on the fringes of the financial system where both legitimate innovation and illicit activity often meet. Her letter describes these brokers as “early warning sensors” for the world of digital assets. but Instead of pushing for lighter rules, the association… makes It is a strikingly technocratic argument: that effective oversight now depends on common technical standards, no Simply more organization.
For corporate compliance teams, this approach suggests moving toward what might be called “Compliance as a codeInstead of emailing CSV files to regulators or maintaining duplicate internal dashboards, companies can push structured evidence and risk signals through a common Treasury-approved blueprint. Every interaction will be verifiable, version controlled, and privacy-conscious.
Whether or not the Treasury Department adopts the Assembly’s recommendations wholesale, the direction of travel is unambiguous. Compliance can become data-driven, privacy-preserving, and continuously auditable.
