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Banks want new rules. Specifically, they want regulators to rewrite how anti-money laundering frameworks apply to stablecoin secondary markets — and they’re not being quiet about it.
A coalition of banking industry groups has formally pushed for updated AML regulations that zero in on higher-risk activities inside stablecoin secondary markets. The core argument is pretty straightforward: the current rulebook wasn’t built for this. Stablecoins — digital currencies pegged to assets like the US dollar — have moved fast into mainstream finance, and the secondary markets where they get traded after initial issuance have basically outrun the compliance infrastructure designed to police them. Banks say that gap is a real problem, and they want regulators to close it before it gets worse.
Not a small ask.
The banking industry’s position is that existing AML frameworks are too broad and too blunt to handle the specific risks stablecoin transactions create. When a stablecoin moves through secondary markets — changing hands between wallets, exchanges, and counterparties far removed from the original issuer — the compliance trail gets murky fast. Traditional AML rules were built around banks knowing their customers. Secondary crypto markets don’t always work that way. Industry groups argue that without targeted rules for these environments, bad actors can exploit the gaps pretty easily.
Why Secondary Markets Are the Real Problem
Primary issuance of stablecoins is one thing. An issuer mints tokens, goes through some level of verification, and the asset enters circulation. That part has at least some oversight attached to it. Secondary markets are a different story entirely.
Once stablecoins are in circulation, they trade freely. Peer-to-peer transfers, decentralized exchanges, cross-border transactions — all of it happens largely outside the traditional banking compliance perimeter. Banks say that’s where the risk concentrates. And it’s where, they argue, AML rules need to be most specific and most enforceable.
The call from industry groups isn’t to regulate everything equally. It’s to focus regulatory energy where the actual danger is. High-risk activities — large anonymous transfers, transactions involving jurisdictions with weak oversight, patterns that look like layering — should face tighter scrutiny than routine low-value transfers. That kind of risk-tiered approach is pretty standard in traditional finance. Applying it to stablecoin secondary markets is what banks are asking for now.
Unclear yet whether regulators are ready to move that fast.
A Broader Push to Modernize AML Standards
The banking industry’s push isn’t happening in a vacuum. Stablecoin adoption across major financial markets has grown sharply in recent years, and regulators in multiple jurisdictions are already wrestling with how to handle these assets. The US, the EU, and several Asian markets have all moved toward some form of stablecoin oversight, though the specifics vary widely and the secondary market question remains largely unresolved almost everywhere.
Trade groups within banking say that’s the problem. Fragmented rules across jurisdictions create arbitrage opportunities. A stablecoin transaction that would trigger scrutiny in one market can route through another where the rules are looser. Without coordinated, targeted frameworks that specifically address secondary market risks, that kind of regulatory arbitrage is probably going to keep happening.
The groups are also pushing for alignment with international AML standards — the kind of interoperability that makes cross-border enforcement actually workable. Right now, they argue, the patchwork of rules doesn’t add up to meaningful protection.
It’s worth noting that banks themselves have a stake in getting this right. As more institutions explore stablecoin integration for payments, settlements, and treasury operations, the compliance risk they inherit from secondary market exposure grows. If a stablecoin that passed through a poorly regulated secondary market ends up on a bank’s balance sheet or inside a payment flow, that bank can face serious regulatory consequences. So the push for clearer rules is partly self-interested — and probably more urgent internally than the formal advocacy letters let on.
The industry groups say they’re committed to working with regulators to shape whatever framework comes next. They want rules that actually match the risk profile of the market, not rules transplanted from traditional finance without adjustment. Whether that collaboration produces something concrete, and how quickly, isn’t clear yet.
What is clear: the banking sector thinks the current setup isn’t good enough. Secondary markets for stablecoins are growing, the transactions inside them are complex, and the AML tools regulators have right now weren’t designed for this environment. The groups want that fixed. They’ve said so formally, and they’re not backing down from the position.
No specific regulatory response has been announced.
Frequently Asked Questions
What are banking groups specifically asking regulators to do about stablecoins?
Banking industry groups are calling for new AML regulations focused on high-risk activities in stablecoin secondary markets, arguing that current frameworks don’t adequately cover transactions that occur after initial issuance.
Why are stablecoin secondary markets considered higher risk than primary issuance?
Secondary markets involve stablecoins trading freely between wallets, exchanges, and cross-border counterparties with less oversight than the original issuance process, making them more vulnerable to money laundering and other illicit activity according to the banking groups.
