U.S. regulators want bank-style ID checks for stablecoin issuers
A coalition of U.S. regulators has proposed new customer identification rules that would force many payment stablecoin issuers to verify the identities of users much like banks do. The Federal Reserve Board on Thursday published a joint proposal — developed with FinCEN, the FDIC, the OCC and the NCUA — that would require covered “permitted payment stablecoin” issuers to maintain effective Customer Identification Programs (CIPs) under the Bank Secrecy Act.
Key points
- The proposal, part of the GENIUS Act implementation, appears in a 117-page notice and would formally treat permitted payment stablecoin issuers as financial institutions for BSA purposes.
- Agencies would require issuers to collect and verify basic customer data before opening an account relationship: name, address, date of birth (or formation date for entities), and an identification number.
- Issuers must adopt risk-based procedures to form a “reasonable belief” in each customer’s true identity, taking into account factors such as issuer size, business model, customer base, account types, and onboarding methods.
- The rule would apply when a user establishes a formal relationship with an issuer — for example, for issuance, redemption, custody, reserve management, or other authorized services.
- Simply holding or transferring a stablecoin in the secondary market generally would not create an account relationship with the issuer, and therefore typically would not trigger the CIP obligations. Regulators noted it would be impractical to require identity checks for every stablecoin transfer because issuers often lack direct relationships with secondary-market users.
- The agencies will accept public comments for 60 days after the notice appears in the Federal Register.
Why it matters
If finalized, the rule would fold many payment stablecoin issuers into standard anti-money-laundering (AML) rules that banks and credit unions already follow, raising compliance obligations and operational costs for issuers. It also clarifies a boundary between direct issuer relationships (where CIPs are required) and broader market activity (where they generally are not), which should ease burdens on peer-to-peer transfers and intermediated trading.
Regulatory context and state frameworks
The proposal implements provisions of the GENIUS Act and would apply not only to federally supervised issuers but also to issuers operating under eligible state regulatory frameworks authorized by the law. The GENIUS Act permits issuers with no more than $10 billion in outstanding stablecoins to operate under certified state regimes. That provision has prompted a recent push from some senators to preserve state roles: on June 16, a bipartisan group led by Senator Cynthia Lummis asked Treasury Secretary Scott Bessent to clarify how states can obtain certification for their own stablecoin frameworks.
Agency views and recent NCUA activity
NCUA Chairman Kyle Hauptman said the proposal “mirrors existing customer identification requirements used by credit unions” and reinforces efforts to prevent money laundering and terrorist financing. The NCUA has already floated related rules: a proposed operational and risk-management rule for licensed payment stablecoin issuers last month, and a separate February 2026 proposal on issuer applications.
Next steps
The agencies are soliciting public comment for 60 days from Federal Register publication. Stakeholders in the crypto industry — especially issuers, custody providers and state regulators — will likely scrutinize the practical scope of the proposed CIPs, the mechanics of identity verification for programmatic and API-based onboarding, and how the rule will interact with state-certified regimes under the GENIUS Act.
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