The U.S. Treasury's Financial Crimes Enforcement Network and the Office of Foreign Assets Control have proposed new compliance rules under the GENIUS Act, which classify permitted payment stablecoin issuers (PPSIs) as financial institutions under the Bank Secrecy Act. This means they must implement full anti-money laundering (AML) and counter-terrorism financing (CFT) programs, including filing suspicious activity reports and maintaining customer due diligence at bank-grade standards. The compliance burden is expected to cost millions annually, which could be unsustainable for smaller issuers. The rules require PPSIs to have the technical capability to block, freeze, and reject transactions on blockchains, adding another layer of complexity. While the GENIUS Act allows smaller issuers to opt for state-level regulation, the compliance costs remain high, potentially leading to significant market consolidation. The implications of these regulations could reshape the stablecoin landscape, favoring larger players like Tether and Circle, which can absorb the costs of compliance, while smaller issuers may struggle to survive in this new regulatory environment.