The Financial Crimes Enforcement Network (FinCEN), together with federal banking regulators, has proposed new customer identification program (CIP) requirements for payment stablecoin issuers, a move designed to bring portions of the rapidly growing stablecoin market under a regulatory framework similar to that applied to traditional financial institutions.
Under the proposal, payment stablecoin issuers would be required to establish and maintain customer identification programs intended to verify customer identities and support anti-money-laundering and counter-terrorist financing efforts. Regulators are also seeking public comment on the use of digital identity solutions and verifiable credentials, as well as whether certain requirements should extend beyond direct issuer-customer relationships into secondary-market stablecoin activity.
The rule aims to strengthen anti-money-laundering safeguards and align stablecoin oversight with existing financial regulations. This development comes as stablecoins have gained significant traction in the financial ecosystem, prompting regulators to address potential risks related to illicit finance. The proposal would require payment stablecoin issuers to implement customer identification programs similar to those used by banks and broker-dealers.
FinCEN and federal banking regulators are now soliciting feedback on various aspects of the proposal, including the use of digital identity tools and verifiable credentials, as well as the market structure of stablecoins. The comment period will provide industry participants and the public an opportunity to weigh in on the proposed rules before they are finalized.
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