AFAIK there are no FDIC insured stable coins - there's apparently USDF[1] which is being promoted by FDIC insured banks but the coins themselves aren't subject to FDIC insuring and could quite possibly either bankrupt the backing entity or be abandoned in the case of a bank run.

Which stablecoins were you talking about?

1. https://www.coindesk.com/markets/2022/01/13/fdic-still-uncle...

In that case, and with the caveat that deposit insurance is wired and uncertain at the best of times, that makes stablecoin a regulated bank.

This makes it for for the user. I don't see how a bank can comply with banking law though. How does a bank prevent criminals, sanctioned orgs, money launderers or whatnot from using it?

It's possible that regulators will leave a loophole like this in play. They aren't always sharp.

What that is, is a bank where account are a wallet. It's still a USD bank account.