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TCH Submits Comments to FinCEN on Ways to Streamline, Modernize, and Update the AML/CFT Regime as it Relates to Stablecoins

The Clearing House Association, L.L.C. (“TCH”) submitted comments in response to the Financial Crimes Enforcement Network’s (“FinCEN”) request for information and comment on ways to streamline, modernize, and update the anti-money laundering and countering the financing of terrorism (“AML/CFT”) regime in the United States. TCH’s comment letter notes the rapid growth of stablecoins, and risks associated with them, as well as gaps that exist between the AML/CFT regulations applicable to nonbank stablecoin arrangements and those applicable to banks’ payments-related activities and functionally similar stablecoin-related activity. TCH urged FinCEN to take action to address meaningful gaps between how AML/CFT regulations apply to banks’ payments-related activities and functionally similar stablecoin-related activity and how such regulations apply to nonbank stablecoin arrangements. In particular, TCH recommended that FinCEN:

  • Address disparities between customer due diligence (“CDD”) requirements applicable to banks and those applicable to nonbank stablecoin arrangements;
  • Address disparities between requirements relating to correspondent relationships applicable to banks and those applicable to nonbank stablecoin arrangements;
  • Address disparities between requirements relating to business relationships and transactions from higher risk countries applicable to banks and those related to nonbank stablecoin arrangements; and
  • Address potential disparities relating to beneficial ownership by proceeding with FinCEN’s rulemaking to implement reporting requirements regarding beneficial owners and ensuring that virtual asset service providers, like banks, are required to identify the beneficial owners of legal entity customers and record relevant information on trusts that require the filing of a document with the secretary of state or similar office.

To read the full letter click here.