FinCEN and Fed Withdraw Proposal to Lower Digital Transfer Threshold to $250
Key Facts
The U.S. Financial Crimes Enforcement Network on November 6, 2026, announced the withdrawal of a proposal with the Federal Reserve Board that would have amended recordkeeping and the "Travel Rule" to cover convertible virtual currencies. The amendment would have lowered the threshold for collecting and retaining information on transfers that begin or end outside the United States from $3,000 to $250. It also would have lowered the same threshold for requirements to transmit information among institutions participating in the payment chain. The withdrawal halts this particular proposal before it becomes a final rule. The agency said the Federal Reserve Board withdrew it alongside FinCEN.
The proposal clarified that the rules would apply to domestic and cross-border transfers involving convertible virtual currencies, as well as digital assets that are legal tender in the recipient’s jurisdiction. Its scope therefore extended beyond transfers crossing U.S. borders alone. Existing federal rules, known as the recordkeeping requirements and the Travel Rule, require banks and nonbank financial institutions to collect, retain and transmit transfer information when the amount is $3,000 or more. FinCEN issues the rule governing information transfers between institutions. This means withdrawing the amendment does not eliminate existing obligations at their current threshold.
The original proposal was published on October 27, 2020, and the notice at the time allowed public comments through November 27 of that year. The agencies said they received nearly 3,000 comments from depository institutions, money services businesses, trade associations, individuals and other parties. The notice said a large majority of the comment letters were substantially similar. Many commenters objected that lowering the threshold to $250 could impose a significant regulatory burden, particularly on smaller financial institutions. They said this level would increase the number of transactions subject to requirements for collecting, retaining and transmitting information.
The agencies based their decision to withdraw the proposal on the more than five years since its publication and changes in the convertible virtual currency industry during that period. FinCEN said in its statement that additional public input would be useful, while the official notice said any future amendment should account for recent developments to remain fit for purpose. The notice said convertible virtual currency markets had matured and new legal frameworks had begun to emerge. One example it cited was the enactment of a law to establish a regulatory framework for payment stablecoins on July 18, 2025. The agencies linked these developments to the need to reassess any proposed amendments before adopting them.
The current withdrawal follows a separate action FinCEN took in October 2026, when it withdrew a proposal concerning transactions in virtual currency or digital assets involving unhosted wallets or wallets in jurisdictions designated by the agency. That earlier action concerns a different regulatory scope from the recordkeeping requirements and Travel Rule addressed by the current withdrawal. The current proposal focuses on the transfer threshold and requirements to collect, retain and transmit information, including for cross-border transfers. Neither action changes, within its respective scope, the existing federal threshold of $3,000 or more. The current withdrawal notice is scheduled to be published in the Federal Register on November 9, 2026.
The agencies said withdrawing the proposal provides clarity to the public that they will not issue a final rule without providing an additional opportunity for public comment. This sets a procedural requirement for any future effort to reconsider similar amendments. The commitment comes in light of comments the agencies received on the impact of a $250 threshold, as well as changes in the virtual currency industry and the legal frameworks surrounding it. The notice did not set a date for a replacement proposal or new amendments. The notice is scheduled for official publication in the Federal Register on November 9, 2026.