U.S. proposal applies bank-style ID rules to stablecoin issuers

U.S. financial regulators proposed bank-style customer identification requirements for permitted payment stablecoin issuers under the GENIUS Act, while excluding wallet-to-wallet and other secondary-market transfers.

The joint proposal was issued by FinCEN, the Federal Reserve, the Office of the Comptroller of the Currency, the FDIC and the NCUA. It would require permitted payment stablecoin issuers to establish Customer Identification Programs similar to those used by banks and other financial institutions.

Under the proposal, permitted payment stablecoin issuers would be treated as financial institutions for purposes of customer identification requirements under the Bank Secrecy Act framework. Issuers would need to collect and verify information from customers who open accounts directly with them, including names, addresses, dates of birth or formation, and identification numbers.

The proposal would apply to both federal and state-qualified issuers operating under the GENIUS Act framework. It targets the direct relationship between an issuer and a customer and would apply when an individual or entity opens an account or otherwise establishes a direct account-based relationship with a permitted payment stablecoin issuer.

The proposal states Customer Identification Programs help institutions form a reasonable belief about customers’ true identities and support anti-money-laundering and counter-terrorist financing efforts.

A central element of the proposal is what it excludes. Wallet-to-wallet transfers, trading on exchanges and other secondary-market transactions would not automatically trigger customer identification obligations for stablecoin issuers.

The agencies argued that treating every stablecoin holder or every blockchain transaction as a direct customer relationship would be difficult to implement and could undermine the practical operation of stablecoin networks.

If finalized, the rule would require issuers to perform identity checks at account opening and would increase compliance responsibilities for permitted payment stablecoin issuers. The proposal states the measures aim to strengthen anti-money-laundering and counter-terrorist financing protections without imposing identity checks on every participant in open blockchain networks.

The proposal is part of ongoing regulatory work to implement the GENIUS Act’s stablecoin provisions and to clarify how existing anti-money-laundering frameworks apply to digital assets and their issuers.