U.S. financial regulators proposed classifying permitted payment stablecoin issuers (PPSIs) as financial institutions under the Bank Secrecy Act and extending customer identity verification requirements to the sector.
The Federal Deposit Insurance Corporation (FDIC), the Federal Reserve, the Office of the Comptroller of the Currency (OCC), the National Credit Union Administration (NCUA), and the Financial Crimes Enforcement Network (FinCEN) introduced a proposed rule that would require licensed payment stablecoin issuers to implement comprehensive customer identification programs (CIPs).
The initiative implements provisions of the GENIUS Act, which took effect in July 2025. Under the proposal, each payment stablecoin issuer would be required to develop a written customer identification program tailored to the size of its business and its risk profile. The program would have to include:
- procedures for verifying the identity of each customer;
- collection and storage of identification data;
- procedures for cases in which a customer’s identity can’t be verified.
Regulators proposed requiring issuers to collect the following customer information before opening an account:
- name;
- date of birth;
- address;
- identification number.
For individuals, acceptable verification documents could include passports and driver’s licenses. For companies, issuers could rely on incorporation documents, licenses, and other official records confirming the legal entity’s existence. The collected information would have to be retained for at least 5 years after an account is closed.
The proposal also requires issuers to screen customers against government lists of individuals and organizations linked to terrorism and to maintain procedures for filing suspicious activity reports. Issuers would also be required to notify customers that their information is being collected for identification purposes.
According to regulators’ estimates, the proposed rule could be expected to apply to approximately 50 PPSIs in each of the first three years of the GENIUS Act being effective.
The proposal places particular emphasis on the relationship between stablecoin issuers and the banking sector. Because many future issuers are expected to operate as subsidiaries of insured depository institutions, they would be allowed to leverage the infrastructure and resources of their parent banks’ identification programs, provided they comply with all applicable legal requirements. In addition, issuers would be permitted to rely on identification procedures performed by other federally regulated financial institutions if the parties have a relevant agreement in place and AML/CFT requirements are met.
Regulators also clarified that CIP requirements would apply only to direct relationships between issuers and customers. Secondary market transactions, where users interact with stablecoins through exchanges, wallets, or smart contracts without direct contact with the issuer, wouldn’t be covered by the rules.
The proposal follows broader efforts by U.S. policymakers to establish a regulatory framework for digital assets. In 2026, Donald Trump signed an executive order aimed at modernizing FinTech regulation and integrating digital assets into the traditional financial system. The SEC also identified the development of a comprehensive regulatory framework for digital assets and blockchain infrastructure as a key priority for 2026 through 2030. In addition, U.S. senators updated the text of the CLARITY Act and introduced the PARITY Act, which seeks to modernize tax rules for the digital asset market.
