The Federal Reserve is inviting public comment on a draft rule that would obligate payment stablecoin issuers, such as Circle’s USDC, to implement robust customer identification programs.
Regulatory Proposal Overview
The proposed regulation mirrors the anti‑money‑laundering standards already applied to banks and credit unions, requiring permitted payment stablecoin issuers to verify the identity of every account holder. It seeks to close loopholes that enable illicit finance within the stablecoin sector while preserving the innovative edge of blockchain‑based assets. The rule is part of the Guiding and Establishing National Innovation for US Stablecoins ($GENIUS) Act, coordinated with FinCEN and the OCC.
Official Commentary
Fed Governor Michael Barr praised the initiative as a critical step toward curbing money‑laundering risks linked to crypto payments. He warned, however, that the current framework does not fully address illicit activity in secondary‑market trades of payment stablecoins. Barr emphasized that additional safeguards are needed to protect investors and the broader market.