Federal Reserve Proposes Bank-Style Identity Verification Rules For Stablecoin Issuers Under GENIUS Act
The Federal Reserve Board requested public touch upon a proposal that will require sure fee stablecoin issuers to keep up an “efficient buyer identification program,” bringing them consistent with identity-verification requirements lengthy utilized to banks and credit score unions.
The rule is being issued collectively by the Fed, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the National Credit Union Administration. Together, the 5 businesses are implementing a directive from the GENIUS Act, the stablecoin framework signed into legislation in 2025, which requires permitted fee stablecoin issuers (PPSIs) to be handled as monetary establishments underneath the Bank Secrecy Act and to confirm the identification of their account holders.
The proposal would create a brand new part of federal regulation, 31 CFR Part 1033, protecting issuers regulated on the federal degree in addition to people who decide into state-level supervision underneath the Act. Comments are due 60 days after the rule is revealed within the Federal Register.
Key Provisions of the Proposed Rule
Under the draft rule, a stablecoin issuer’s buyer identification program would want to gather, earlier than an account is opened, a buyer’s identify, date of start (or formation date for entities), a bodily deal with, and an identification quantity — sometimes a tax ID for U.S. individuals, or a passport or related authorities doc for international clients. P.O. packing containers and virtual-office addresses wouldn’t fulfill the deal with requirement.
Issuers would then want risk-based procedures to confirm that info, both by paperwork like a driver’s license or passport, or by non-documentary strategies resembling cross-checking towards client reporting businesses or public databases. Regulators are additionally leaving room for digital identification instruments and verifiable credentials, although no particular technical normal is being mandated for now. Identity information would have to be saved for 5 years after an account closes.
Notably, the businesses clarified that the duty applies solely to direct buyer relationships — to not each pockets that merely interacts with an issuer’s sensible contract, a distinction aimed toward holding the rule workable for issuers working on public blockchains.
The proposal follows an earlier advance discover that drew roughly 450 feedback from banks, exchanges, and commerce teams, and is one piece of a broader set of GENIUS Act guidelines already advancing on the OCC, FDIC, and NCUA.
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