The Blockchain Association has formally urged five U.S. regulators to keep stablecoin customer identification requirements under the GENIUS Act limited to direct relationships between issuers and their customers. In a 15-page comment letter submitted by the Aug. 21 deadline and summarized Aug. 24, the trade group responded to a proposal from FinCEN, the OCC, the Federal Reserve, the FDIC, and the NCUA.
The proposed rule would require permitted payment stablecoin issuers to establish written, risk-based customer identification programs. Issuers would collect names, addresses, birth dates or formation dates, and identification numbers, then verify identities through documentary or non-documentary methods. Records would generally be kept for five years after account closure.
The association supports that direct issuer-customer structure, but warned that extending identification duties to independent peer-to-peer transfers would exceed the law. It said issuers often do not know who sends or receives stablecoins because validators confirm transfers without issuer approval before settlement. Regulators estimate about 99% of stablecoin transaction activity occurs in secondary markets, including self-hosted wallet transfers, exchange trades, and vendor payments.
The group also asked agencies to clarify the definitions of “account,” “customer,” and “digital asset service provider.” It wants one-time redemptions by non-account holders and vendor relationships excluded, and said services such as analytics, market data, and blockchain infrastructure should not create customer accounts. The association further warned against duplicate checks when one company both issues stablecoins and operates an exchange, since exchange customers already face Bank Secrecy Act controls.
On digital identity, the letter supported flexible verification tools, including zero-knowledge proofs and taxpayer identification numbers from trusted third-party sources. The Blockchain Association also wants redemption activity submitted through exchanges to treat the exchange as the direct party. It asked regulators to align the customer identification rule with separate anti-money laundering and sanctions rules to reduce conflicting compliance duties.
The broader GENIUS Act framework is expected to restrict unlicensed payment stablecoin issuance in the U.S. beginning Jan. 18, 2027. Issuers would receive 12 months after publication to comply with the final rule.
