TLDR
- U.S. regulators proposed customer ID rules for stablecoin issuers.
- The proposal implements parts of the GENIUS Act.
- Stablecoin issuers would be treated as financial institutions under the BSA.
- Issuers must verify customer identities and keep verification records.
- Public comments will remain open for 60 days after Federal Register publication.
U.S. financial regulators have proposed new customer identification requirements for stablecoin issuers under the GENIUS Act, moving another part of the digital asset market closer to bank-style compliance standards.
The Federal Reserve, Treasury Department, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, National Credit Union Administration and Financial Crimes Enforcement Network released the proposed rule on Thursday. The rule would require permitted payment stablecoin issuers to maintain customer identification programs similar to those used by banks, brokerages, mutual funds and futures commission merchants.
The proposal is part of the implementation of the Guiding and Establishing National Innovation for U.S. Stablecoins Act, known as the GENIUS Act. The law, enacted in July 2025, created a federal framework for stablecoin issuers covering licensing, reserves, capital standards, risk management and compliance obligations.
Stablecoin Issuers Face Bank Secrecy Act Standards
Under the proposed rule, permitted payment stablecoin issuers would be treated as financial institutions under the Bank Secrecy Act for customer identification purposes. That would subject eligible issuers to anti-money laundering and know-your-customer procedures when users open accounts.
The proposal states that issuers must adopt reasonable procedures to verify the identity of any person seeking to open an account, where reasonable and practicable. It also requires issuers to keep records of information used for verification, including names, addresses and other identifying details.
Stablecoin issuers would also be required to determine whether customers appear on government lists of known or suspected terrorists or terrorist organizations. The requirements are intended to reduce money laundering, terrorist financing, sanctions evasion and other illicit finance risks tied to stablecoin activity.
Regulators said the obligations would be comparable to existing customer identification rules for traditional financial institutions. The rule would apply to federally supervised issuers and qualifying state-supervised stablecoin issuers, creating a more uniform compliance framework across the sector.
GENIUS Act Implementation Moves Into Rulemaking Stage
The latest proposal is a notice of proposed rulemaking, which opens another stage in the federal process before final rules can be issued. The agencies will accept public comments for 60 days after publication in the Federal Register.
The Treasury Department had earlier received about 450 comments after regulators issued a preliminary document in September seeking feedback on GENIUS Act implementation. The new proposal reflects the next formal step before the agencies review responses and decide on final regulatory language.
FinCEN has also pursued related rulemaking to apply the GENIUS Act’s anti-money laundering provisions to stablecoin issuers. Together, the proposals show how federal agencies are moving to place stablecoin activity inside existing financial crime compliance systems.
The rule comes as stablecoins continue gaining use in payments, trading, remittances and digital asset settlement. Crypto-native issuers such as Tether and Circle remain dominant in the dollar-backed stablecoin market, while traditional financial firms have also expanded into the sector.
Fed Governor Raises Secondary Market Concerns
Federal Reserve Governor Michael Barr said he remains concerned that the GENIUS Act framework may not fully address illicit finance risks linked to secondary market stablecoin activity. His statement focused on transactions that occur outside direct issuer-account relationships.
Barr said some digital asset service providers are subject to anti-money laundering and counter-terrorist financing rules in their home jurisdictions, but he warned that bad actors may still evade restrictions when transacting in digital assets.
The 130-page proposal asks whether customer identification requirements should extend to secondary market activity, and under what circumstances. Regulators also asked for feedback on the potential benefits and drawbacks of expanding the rule beyond account-opening relationships with stablecoin issuers.
The question is important because stablecoins often circulate widely after issuance. Tokens can move through exchanges, wallets, decentralized platforms and payment applications, which may create compliance challenges if issuer-level identification rules do not reach later transfers.
The proposal may increase compliance costs for stablecoin issuers, but it could also provide clearer standards for firms seeking federal or state approval under the GENIUS Act. A uniform customer identification rule may help regulated issuers compete for institutional partnerships where anti-money laundering controls are required.
