- GENIUS Act rules would limit issuer identity checks to direct primary-market customers.
- Peer-to-peer transfers and smart-contract use would generally fall outside issuer CIP duties.
- The group seeks clearer definitions, flexible verification, and coordinated compliance dates.
The Blockchain Association has backed proposed GENIUS Act rules governing customer identification for payment stablecoin issuers. Its comment supports identity checks when issuers deal directly with customers. It opposes extending those duties to independent peer-to-peer transfers. The filing also requests clearer definitions and protection from duplicated compliance work. Five federal agencies issued the proposal.
GENIUS Act Rules Keep Identity Checks in Primary Market
In a letter signed, the proposal arrived in June through FinCEN, the OCC, Federal Reserve, FDIC, and NCUA. It requires permitted payment stablecoin issuers to maintain written, risk-based customer identification programs. These standards would operate within issuers’ wider Bank Secrecy Act programs.
Before opening an account, issuers would collect a name, address, birth or formation date, and identification number. They could verify customers through documents, non-documentary methods, or both. Issuers would generally retain the records for five years.
The proposal confines customer identification to primary-market activity involving direct issuer contact. Examples include issuance, redemption, conversion, repurchase, and custody.
Stablecoin ownership, exchange trading, wallet transfers, and smart-contract interactions would not automatically create issuer accounts. The Blockchain Association says GENIUS Act rules should preserve that limit.
Federal agencies estimate about 99% of stablecoin transaction activity occurs in secondary markets. Issuers usually lack customer data for those transfers.
Stablecoin Issuers Seek Clearer Definitions and Timing
The association wants narrower definitions of account, customer, and digital asset service provider. It says one-off redemptions and vendor relationships should not automatically create customer accounts.
It also seeks protection from duplicate checks when banks or exchanges have already verified customers. The proposal permits reliance on federally regulated institutions under contracts and annual certifications. Issuers would still carry responsibility for compliance.
The group supports flexible verification, including digital identities, verifiable credentials, and zero-knowledge proofs. It says GENIUS Act rules should not prescribe one technology.
Public comments closed August 21. A final rule would take effect 12 months after issuance. The association wants that schedule aligned with separate anti-money laundering and sanctions rules.
That coordination would place the GENIUS Act rules on the same implementation timeline as related issuer obligations.
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