U.S. Treasury Says Digital Identity and AI Are Key to More Effective AML

The GENIUS Act, which took effect on July 18, 2025, requires the U.S. Treasury Department to report to Congress on new anti-money laundering tools for digital assets. Identity risk is a central concern: FinCEN data show that about 1.6 million Bank Secrecy Act filings in 2021 involved identity-related issues, accounting for 42% of all filings that year and $212 billion in suspicious activity.

The Treasury submitted its report to Congress in March 2026 after reviewing more than 220 comments received between August and October 2025. It advocated using digital credentials to strengthen customer identification at banks and AI to focus scrutiny on high-risk transactions. FinCEN separately proposed a new risk-based AML/CFT rule on April 7, replacing its 2024 proposal. The comment period closed on June 9.