ABA Says Bank Secrecy Act Should Apply Equally to All Digital Market Participants
"We urge Treasury to align innovation in digital assets, across all users, with the core safeguards that protect consumers and the financial system."
ABA Letter to U.S. Department of the Treasury
"We urge Treasury to align innovation in digital assets, across all users, with the core safeguards that protect consumers and the financial system."
ABA Letter to U.S. Department of the Treasury
The American Bankers Association ("ABA") urged the U.S. Department of the Treasury to ensure consistent, technology-neutral regulation of digital assets under the Bank Secrecy Act ("BSA").
In a comment letter, responding to Treasury’s Request for Comment on innovative methods to detect illicit activity involving digital assets, the ABA emphasized that consistent, technology-neutral application of the BSA is critical to safeguarding the financial system and preventing illicit finance. The Association noted Treasury’s ongoing work to implement the GENIUS Act and a recent Executive Order promoting responsible digital innovation but said that more clarity and coordination are needed across regulatory agencies.
The ABA recommended:
- Equivalent BSA Regulation. The ABA urged Treasury to ensure that non-bank digital market participants—including stablecoin issuers—are subject to BSA standards equivalent to those imposed on banks, including customer identification, beneficial ownership verification, and regular examination to close illicit finance loopholes.
- Modernize Existing Rules. The ABA called on regulators to update BSA/AML frameworks to address both traditional and emerging risks tied to decentralized assets, such as mixers, cross-chain swaps, and borderless transactions, aligning with the July 2025 recommendations from the President’s Working Group on Digital Asset Markets.
- Provide Interim Guidance. The ABA asked Treasury to issue interim guidance clarifying how banks must apply existing rules—like the recordkeeping and travel rules—to digital assets in a cost-effective way, given limited interoperability and inconsistent standards.
- Exempt Banks from Duplicative Regulation. The ABA emphasized that banks acting as digital market participants should not face separate or overlapping BSA obligations, since their enterprise-wide compliance programs already meet robust supervisory requirements.
- Support Responsible Innovation. The ABA encouraged Treasury to promote the use of new tools to detect and deter illicit finance, including blockchain analytics, zero-knowledge proofs, AI-driven monitoring, digital identity frameworks such as mobile driver’s licenses, and APIs for real-time reporting and interoperability.