The Blockchain Association, an industry advocacy group for digital assets, has voiced strong support for key elements of proposed federal rules implementing customer identification requirements for permitted payment stablecoin issuers under the GENIUS Act.
In a comment letter submitted on August 21, 2026, the organization endorsed the core approach outlined by the US Treasury’s Financial Crimes Enforcement Network (FinCEN), the Office of the Comptroller of the Currency (OCC), the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the National Credit Union Administration (NCUA).
The GENIUS Act, signed into law in July 2025, established the first comprehensive US federal framework for payment stablecoins.
It requires permitted payment stablecoin issuers (PPSIs) to maintain effective customer identification programs (CIPs) as part of broader efforts to combat illicit finance while fostering responsible innovation and reinforcing the U.S. dollar’s role in digital payments.
The joint proposed rule, published in the Federal Register in June 2026, aims to apply a CIP framework to these issuers that aligns closely with existing Bank Secrecy Act standards used by traditional financial institutions.
In its letter, the Blockchain Association acknowledged the agencies’ decision to confine CIP obligations primarily to direct relationships between issuers and customers in the primary market.
This covers activities such as issuing, redeeming, or converting stablecoins where the issuer has a formal contractual relationship with the account holder.
The group argued that extending these requirements to secondary-market peer-to-peer transfers—where issuers typically lack custody, intermediary control, or knowledge of the parties involved—would be impractical and inconsistent with the statute.
According to the association, the GENIUS Act itself limits verification duties to “account holders with the permitted payment stablecoin issuer,” making broader downstream obligations unauthorized and unworkable given the nature of blockchain transactions executed via smart contracts without issuer involvement.
The organization also recommended several refinements to strengthen the final rule.
These include clearer definitions of terms such as “account,” “customer,” and “digital asset service provider” to exclude one-off redemptions, non-stablecoin activities, vendor relationships, and secondary roles as service providers.
It urged agencies to avoid overlapping or duplicative compliance burdens with other anti-money laundering rules and to explicitly allow flexibility in verification methods, including electronic collection of information, reliance on other regulated institutions (with reasonable safeguards), and modern tools such as digital identity solutions.
Additionally, the Blockchain Association called for aligning the effective date of the CIP rules with related FinCEN and OFAC rulemakings on anti-money laundering, counter-terrorism financing, and sanctions compliance for PPSIs.
This coordination would promote consistency and reduce implementation challenges for the industry.
The group emphasized that effective implementation of the GENIUS Act should deliver robust safeguards against illicit activity, practical and workable compliance standards, and continued space for innovation in the stablecoin sector. By focusing obligations where issuers have genuine control and relationships, the proposed framework can help protect consumers and the financial system while supporting the growth of dollar-backed digital assets in the United States.