The US Treasury Department's FinCEN and OFAC have drafted a regulatory framework under the GENIUS Act that could significantly impact the stablecoin market. Bill Hughes, a prominent legal expert, highlighted the draft's potential to set new standards for US enforcement, anti-money laundering (AML), and compliance policies in the cryptocurrency sector. The draft distinguishes between primary and secondary markets, with FinCEN proposing a "reasonable" approach that exempts secondary market transactions from customer verification and monitoring obligations. However, OFAC's stance is notably stricter, requiring stablecoin issuers to block and reject prohibited transactions, including those involving sanctioned individuals. This marks a first in crypto regulation by addressing the technical structure of smart contracts. The draft raises questions about whether stablecoin issuers must actively monitor on-chain transactions, potentially transforming them into permissioned network operators, which could spark debates over censorship and centralization.