United States financial authorities have unveiled plans that would obligate certain digital currency firms responsible for payment stablecoins to implement customer verification protocols akin to those demanded of traditional banks. This initiative emerges from the GENIUS Act legislative framework.
The Federal Reserve Board, in collaboration with the Financial Crimes Enforcement Network, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the National Credit Union Administration, jointly announced a 60-day public comment period for the proposed rule. The measure aims to mandate that permitted payment stablecoin issuers establish robust Customer Identification Programs.
According to the 117-page document released by the agencies, the rule would classify these stablecoin issuers as financial institutions under the Bank Secrecy Act, thereby subjecting them to stringent identity verification procedures. Issuers would need to gather and authenticate standard personal data such as full name, residential or business address, date of birth or formation, and a taxpayer identification number before opening an account.
The proposal emphasizes a risk-based approach, allowing issuers to tailor their verification methods based on their size, operational structure, clientele, and account-opening processes. NCUA Chairman Kyle Hauptman underscored that this rule mirrors existing credit union standards and reinforces safeguards against illicit financial activities.
Notably, the rules will generally not extend to secondary market transactions. The agencies clarify that holding or transferring stablecoins through intermediaries or between users does not create a direct account relationship with the issuer, thus exempting most secondary market activity from the new identification obligations. This distinction addresses the practical challenges of applying such requirements to transactions where the issuer has no direct link to the end user.
The timing of this proposal follows recent legislative developments under the GENIUS Act, which permits stablecoin issuers with outstanding balances under $10 billion to operate under state-level frameworks, provided those states receive certification. The new customer identification requirements are set to apply to both federally supervised issuers and those under eligible state regimes.