Wolfsberg Group's NEW GUIDANCE on managing relationships with FIAT-BACKED STABLECOIN ISSUERS.

The Wolfsberg Group has released a significant new guidance document addressing how banks should manage relationships with fiat-backed stablecoin issuers.

This guidance is particularly timely as stablecoins gain traction globally and regulatory frameworks, such as the US GENIUS Act, begin to take shape.

Key Highlights from the Guidance

Banking Services to Stablecoin Issuers

Banks may provide services such as:

• Operating accounts
• Reserve management
• Client settlement accounts

These services require tailored financial crime controls due to the unique risks posed by stablecoins.

Financial Crime Risk Management

The Wolfsberg Group emphasises that:

• Stablecoins offer benefits like price stability and fast settlement, but also pose risks due to pseudonymity and global reach.
• Banks must apply a risk-based approach similar to traditional financial institutions but adapted for the digital asset context.

On-Chain Risk Considerations

Even though banks don’t directly face on-chain risks, they should:

1. Understand the issuer’s awareness of financial crime risks on the blockchain.
2. Assess how the issuer identifies suspicious activity on-chain.
3. Determine if the issuer monitors its ecosystem beyond direct counterparties.

Banks should use this information to decide the level of blockchain analytics required:

• Low-risk issuers: Periodic, high-level monitoring.
• High-risk issuers: Detailed transaction analysis, including indirect exposures.

Reserve Management

Banks must:

• Verify the issuer’s claims about reserves.
• Ensure regular internal and external audits are in place.
• Monitor for unusual activity and compliance with AML and sanctions laws[1][2][3].

Summary

The Wolfsberg Guidance provides a framework for banks to engage with fiat-backed stablecoin issuers responsibly. It balances the promise of innovation with the need for robust financial crime controls, especially in areas like reserve verification and on-chain behaviour monitoring.

References

[1] Wolfsberg Group Guidance on the Provision of Banking Services to Fiat ...https://wolfsberg-group.org/resources/204/

[2] NEWS: Wolfsberg Group warns banks on reserves at stablecoin firms https://www.amlintelligence.com/2025/09/news-wolfsberg-group-warns-banks-on-reserves-at-stablecoin-firms/

[3] The Wolfsberg Group issues guidance on the provision of banking ...https://dev.wolfsberg-group.org/news/guidance-on-the-provision-of-banking-services-to-fiat-backed-stablecoin-issuers