Comment Period Closes on Stablecoin ID Rule Focused on Issuers

A federal proposal to require customer identification programs for permitted payment stablecoin issuers has its public comment period ending today, Aug. 21, 2026, after a 60-day review that began when five agencies published the rule in the Federal Register on June 22.

The proposal was filed jointly by FinCEN, the Office of the Comptroller of the Currency, the Federal Reserve, the FDIC and the NCUA under the GENIUS Act. It would apply only when customers mint or redeem stablecoins directly with an issuer and would not cover secondary-market transfers as drafted.

Under the proposal, permitted payment stablecoin issuers would have to maintain a written, risk-based customer identification program. Issuers would collect specified identifying information before opening an account, verify identity within a reasonable time before or after account opening, retain records, screen customers against government lists designated for CIP purposes, provide customer notice and could rely to a limited extent on other federally regulated institutions for verification.

The agencies set the rule’s perimeter to primary-market activity for practical and technical reasons. The agencies wrote that treating every stablecoin transfer as creating a customer relationship with the issuer would create a global obligation to identify and verify every holder. They added that interactions with smart contracts and transfers on public blockchains typically do not yield the information needed to verify identity, which they said would make a transfer-triggered CIP impractical to implement.

The draft rule leaves most stablecoin circulation outside the CIP requirement, including wallet-to-wallet transfers, exchange trades and protocol interactions. Federal Reserve Governor Michael Barr wrote that the GENIUS Act framework “does not do enough so far to address the risks of illicit finance conducted through secondary market transactions in payment stablecoins.”

Recent enforcement actions cited in the rulemaking show the secondary-market issue at play. Treasury sanctions and blockchain tracing linked more than $6.3 billion through Shelbit, a Dubai-registered exchange sanctioned on Aug. 7, with roughly 88% of the flows occurring on the Tron blockchain in dollar-pegged stablecoins. Those movements did not involve direct mint or redeem operations with issuers and would not have triggered the proposed CIP.

Issuers have used issuer-controlled functions in enforcement this year; some froze assets on sanctioned addresses without a prior CIP having been completed.

The proposal implements Section 4(a)(5)(A) of the GENIUS Act, which directs that payment stablecoin issuers be treated as financial institutions for certain Bank Secrecy Act purposes. Stablecoin issuers have been subject to Bank Secrecy Act obligations since 2019 guidance that named them money services businesses; MSBs have been exempt from the CIP mandate. The new proposal would remove that exemption for permitted payment stablecoin issuers and apply standards drawn from bank practice.

The agencies missed a July 18 statutory deadline for finalizing rules under the GENIUS Act. The agencies proposed that any final CIP rule would take effect 12 months after issuance, which would push compliance obligations into 2027 at the earliest. The broader GENIUS Act framework is not expected to be fully in effect until July 2028. Related rulemakings from the OCC, FinCEN and OFAC have attracted separate comment filings from banks and trade groups.

With the public comment window closing tonight, agencies will review submissions and may revise the proposal before issuing a final rule. Whether the final rule extends identity requirements beyond minting and redemption into secondary markets will be decided during that review.