REGULATION | Key U.S Regulators Propose User-IDs for Stablecoins Under GENIUS Act

U.S. regulators are moving to close one of the biggest remaining gaps between stablecoin issuers and traditional financial institutions, proposing bank-style customer identification requirements that would force issuers to know exactly who is using their tokens.

The proposal, jointly issued by

• The Federal Reserve,
• Treasury Department,
• Federal Deposit Insurance Corporation (FDIC),
• Office of the Comptroller of the Currency (OCC), and
• National Credit Union Administration,

would require permitted payment stablecoin issuers to establish Customer Identification Programs (CIPs) similar to those already mandated for banks under anti-money laundering rules.

Issuers would be required to

• verify customer identities,
• maintain records, and
• screen users

before establishing relationships, marking another major step in implementing the GENIUS Act.

The customer verification proposal complements a broader FDIC rulemaking that seeks to build a comprehensive prudential framework for bank-supervised stablecoin issuers. Beyond KYC obligations, the FDIC’s proposal introduces standards governing reserve assets, capital, liquidity, risk management, redemption rights and custody arrangements, while clarifying that reserves backing payment stablecoins would receive corporate deposit insurance coverage rather than pass-through insurance for token holders. It also sets rules for custodians safeguarding reserve assets and private keys used to issue stablecoins.

Together, the proposals signal that U.S. regulators intend to treat payment stablecoin issuers less like crypto startups and more like regulated financial institutions.

The approach reflects Washington’s effort to bring dollar-backed digital assets into the existing banking and financial crime compliance framework as stablecoins become an increasingly important part of domestic payments and cross-border finance.

The proposed rules are open for public comment for 60 days before regulators finalize the framework that will underpin the GENIUS Act’s implementation.

Stay tuned to BitKE for updates into the global stablecoins regulatory space.

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