U.S. regulators propose bank style customer ID rules for stablecoin issuers

U.S. regulators have proposed requiring certain payment stablecoin issuers to verify customer identities under a new rule issued as part of the GENIUS Act framework.

The Federal Reserve Board said Thursday that it is seeking public comment on a joint proposal that would require covered stablecoin issuers to maintain effective Customer Identification Programs, or CIPs. 

The proposal was issued alongside the Financial Crimes Enforcement Network, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the National Credit Union Administration.

An 117-page notice published by the agencies said the rule would implement provisions of the Guiding and Establishing National Innovation for U.S. Stablecoins Act, known as the GENIUS Act. The proposal would formally treat permitted payment stablecoin issuers as financial institutions under the Bank Secrecy Act and require them to maintain customer identification procedures.

Comments on the proposal will be accepted for 60 days after publication in the Federal Register.

Rule would apply bank style identity checks to stablecoin issuers

The agencies said permitted payment stablecoin issuers would need to collect and verify customer information before opening an account relationship. Required information would generally include a customer’s name, address, date of birth or formation, and identification number.

The proposal would require issuers to adopt risk-based procedures designed to establish a reasonable belief that they know the true identity of each customer. Regulators said those procedures should take into account an issuer’s size, business model, customer base, account types, and methods used to open accounts.

“This is the next step to ensure that permitted payment stablecoin issuers are fully integrated into Bank Secrecy Act regulations,” NCUA Chairman Kyle Hauptman said, adding that the proposal mirrors existing customer identification requirements used by credit unions and sets standards for identifying and verifying account holders.

The proposal follows earlier NCUA rulemakings related to payment stablecoins. The agency said it issued a proposed rule last month covering operational and risk management standards for licensed payment stablecoin issuers and released a separate proposal in February 2026 governing applications from issuers under its jurisdiction.

Regulators exclude most secondary market transactions

The proposed rule draws a distinction between direct dealings with a stablecoin issuer and transactions that occur elsewhere in the market.

Regulators said customer identification requirements would apply when a user establishes a formal relationship with a permitted payment stablecoin issuer through activities such as issuance, redemption, custody, reserve management, or other authorized services.

The agencies also proposed that simply holding or transferring a payment stablecoin would not create an account relationship with the issuer. The document states that secondary market activity, including transfers between users and transactions conducted through intermediaries, generally would not trigger customer identification obligations for the stablecoin issuer.

The agencies said applying customer identification requirements to every stablecoin transfer could be impractical because issuers often do not have direct relationships with users participating in secondary market transactions.

The proposal arrives days after a bipartisan group of U.S. senators urged the Treasury Department to preserve a role for state regulators under the GENIUS Act. In a June 16 letter to Treasury Secretary Scott Bessent, lawmakers led by Senator Cynthia Lummis asked Treasury to provide clearer guidance on how states can obtain certification for their own stablecoin regulatory frameworks.

The GENIUS Act allows issuers with no more than $10 billion in outstanding stablecoins to operate under certified state regulatory regimes. The customer identification proposal states that its requirements would apply not only to federally supervised issuers but also to stablecoin issuers operating under eligible state frameworks established under the law.