Why It Matters
Banks and money transmitters sending cross-border payments will retain the existing $3,000 recordkeeping threshold after the Treasury Department withdrew a 2020 proposal to lower it.
Holders and transmitters of convertible virtual currency and digital assets with legal tender status are also affected. The withdrawn proposal would have revised the definitions of "payment order" and "transmittal order" to clarify that recordkeeping and transmittal requirements apply to domestic and cross-border transactions involving those assets.
The Financial Crimes Enforcement Network (FinCEN) and the Federal Reserve Board, which jointly issued the proposal, say they will not adopt the clarification and will take no further action on it. The notice was published Monday.
The Big Picture
The proposal, published in October 2020, would have lowered the threshold from $3,000 to $250 for transfers that begin or end outside the United States. It covered both the requirement that financial institutions collect and retain information and the requirement to transmit it to other institutions in the payment chain. The agencies say the $3,000 threshold has been in place since 1995 and remains in effect. The notice also says the Federal Reserve Board's Regulation S, which incorporates the substantive requirements of the recordkeeping rule, remains unchanged.
Because the withdrawal leaves existing rules in place rather than imposing new obligations, the notice establishes no exceptions or grandfathering provisions and amends no regulatory text. Banks and nonbank financial institutions are therefore not required under these specific rules to collect, retain, or transmit information on cross-border transfers below $3,000 solely because of the withdrawn proposal.
Broader Context
The agencies cited two reasons for the withdrawal. They wrote that "More than five years have passed" since the proposal was issued and that additional public feedback "would be useful" before adopting similar amendments. They also cited "significant recent developments" in the virtual currency industry, including maturing markets and new legal frameworks.
The notice identifies the GENIUS Act, enacted July 18, 2025, as one such framework. It also cites Executive Order 14178, "Strengthening American Leadership in Digital Financial Technology," and a July 2025 White House report as context for reconsidering future amendments involving virtual currency.
The agencies received nearly 3,000 comments on the 2020 proposal, with a significant majority consisting of substantially similar form letters, according to the notice. Commenters included depository institutions, money services businesses, trade associations and individuals.
The agencies summarized objections to the lower threshold as follows:
- It "would impose a significant regulatory burden on financial institutions, particularly smaller financial institutions."
- It would "disrupt the ability of consumers to send remittances overseas."
- It would "increase the liability exposure of financial institutions required to maintain personally identifiable information."
- The agencies "did not provide sufficient analysis or data to justify the proposed reduction."
- Several commenters argued that the threshold should be increased to account for inflation since 1995.
Many commenters also argued that the comment period was insufficient and that the implementation period should be extended if the proposal were finalized. Others described the proposal as an unwarranted invasion of privacy or an unreasonable search and seizure under the Fourth Amendment.
On the virtual currency clarification, comments were mixed. Virtual currency service providers and their trade associations opposed it, citing technological limitations and the absence of an international messaging standard. They also raised concerns that it could inhibit innovation and that coordination with other regulators developing related rules was insufficient. Some depository institutions, money services businesses and trade associations supported the clarification.
The Bottom Line
The withdrawal took effect Nov. 9. Jimmy L. Kirby, deputy director of the Financial Crimes Enforcement Network, and Benjamin McDonough, secretary of the Federal Reserve Board, signed the notice. The agencies say they withdrew the proposal to provide certainty that they will not issue a final rule on these subjects without another opportunity for public comment.
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