Does OFAC require screening for stablecoin issuance?

Yes. Stablecoin issuers must screen the recipient at mint and the redeemer at burn against the SDN List.

TL;DR

TL;DR: Yes. Issuance and redemption are both value transfers, so an issuer must screen the receiving wallet at mint and the redeeming wallet at burn, and block any match.

Why issuance counts

Minting a stablecoin creates value in a wallet. If that wallet belongs to a designated person, the issuer has facilitated a prohibited transaction. OFAC applies strict liability, so the issuer does not need to intend the violation. Issuance is the first gate, not a formality.

Screen at mint and burn

• Mint: check the recipient address before issuing tokens.
• Burn: check the redeemer address before destroying tokens.
• Ongoing: apply the 50 Percent Rule to majority owned entities.

Implementation

Run a screening call under 100 ms in both paths so issuance and redemption stay fast. Use a live list of SDN names and listed crypto wallets, synced hourly, so newly designated addresses are caught. Log every screen, and add a freeze function to block flagged balances at the contract level.

Redemption is issuance in reverse

Burning tokens is easy to overlook because no new value is created, but the redeemer is still receiving value. Screen the redeemer exactly as you would the minter, and treat the two paths as symmetric. A designated wallet trying to cash out through redemption is just as much a violation as one trying to mint. Keeping the two paths symmetric also keeps the compliance logic simple, because one screen covers both directions of the same token.