Key facts
- U.S. financial regulators have proposed rules for stablecoin issuers under the GENIUS Act.
- The rules require stablecoin issuers to implement customer identification programs (CIP) similar to banks.
- Issuers must collect customer name, date of birth/formation, address, and identification number.
- Procedures for identity verification and checking against terrorist lists are mandated.
- The proposal aims to mitigate illicit finance risks and protect the U.S. financial system.
U.S. financial regulators have jointly proposed new rules that would require payment stablecoin issuers to implement customer identification programs (CIP) akin to those used by traditional banks. The proposal, stemming from the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), aims to mitigate illicit finance risks and safeguard the U.S. financial system.
The proposed rules, released by the Financial Crimes Enforcement Network (FinCEN), the Federal Reserve, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the National Credit Union Administration, mandate that stablecoin issuers collect specific customer information. This includes a customer's name, date of birth for individuals or date of formation for entities, address, and an identification number before opening an account.
Furthermore, issuers would be required to establish procedures for verifying customer identities, including checking against lists of known terrorists or terrorist organizations. The proposal also allows stablecoin issuers to rely on the CIP procedures of other federally regulated financial institutions under reasonable circumstances. Exemptions from these requirements may be granted by the Treasury Secretary with the concurrence of the appropriate federal regulator.
In a related development, FinCEN and other agencies previously proposed rules to apply anti-money laundering (AML), countering the financing of terrorism (CFT), and sanctions obligations to stablecoin issuers. These measures are intended to ensure that stablecoin providers adhere to the same regulatory standards as traditional financial institutions.