U.S. regulators have moved to bring permitted payment stablecoin issuers under the same customer-identification rules banks follow, unveiling a joint proposal that would require these issuers to maintain robust Customer Identification Programs (CIPs).
The Federal Reserve Board said Thursday it is seeking public comment on the joint proposal, issued alongside the Financial Crimes Enforcement Network (FinCEN), the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the National Credit Union Administration (NCUA). The 117-page notice implements parts of the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) and would formally treat permitted payment stablecoin issuers as financial institutions under the Bank Secrecy Act.
Key requirements and scope
- Covered issuers would need to collect and verify customer information before opening an account relationship. Typical data required would include name, address, date of birth (or formation date for entities), and an identification number.
- Issuers must adopt risk-based procedures that create a “reasonable belief” in a customer’s true identity. Those procedures should reflect each issuer’s size, business model, customer base, account types, and onboarding methods.
- The proposal clarifies when CIPs apply: they would be triggered by a formal relationship with an issuer — for example, activities such as issuance, redemption, custody, reserve management, or other authorized services.
- Importantly for markets, simply holding or transferring a payment stablecoin would generally not create an account relationship with the issuer. Secondary market transfers between users and transactions through intermediaries typically would not obligate issuers to perform customer identification, the agencies said, noting it would be impractical to apply CIP rules to every token transfer when issuers often lack direct relationships with end users.
Process and context
- The agencies will accept public comments for 60 days after the proposal is published in the Federal Register.
- Regulators say the move is the next step in integrating permitted payment stablecoin issuers into Bank Secrecy Act regulations and in combating money laundering and terrorist financing. NCUA Chairman Kyle Hauptman said the proposal mirrors existing credit union customer ID standards and “sets clear standards for identifying and verifying account holders.”
Regulatory backdrop
- The CIP proposal follows other NCUA actions on stablecoins: a proposed rule last month on operational and risk management standards for licensed payment stablecoin issuers, and a February 2026 proposal governing applications from issuers under NCUA jurisdiction.
- The proposal also covers issuers operating under certified state frameworks permitted by the GENIUS Act. The law allows issuers with up to $10 billion in outstanding stablecoins to operate under state regimes that receive federal certification.
Political angle
- The proposal arrives days after a bipartisan group of senators led by Cynthia Lummis urged the Treasury to clarify how states can win certification under the GENIUS Act, signaling continued interest in preserving a role for state regulators.
Next steps
Industry stakeholders now have 60 days to weigh in. The debate ahead will likely focus on implementation details, the practical scope of KYC for tokenized transactions, and how federal and state oversight will interact as stablecoin regulation takes shape.
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