US proposes bank-style customer ID rules for payment stablecoin issuers under GENIUS Act

The Federal Reserve and several US agencies have proposed “customer identification program” (CIP) rules for covered payment stablecoin issuers under the GENIUS Act framework. The proposal would treat permitted payment stablecoin issuers as financial institutions under the Bank Secrecy Act, requiring bank-style customer ID checks before opening a relationship. The rules would generally require issuers to collect and verify key customer information (e.g., name, address, date of birth or formation, and an identification number) using risk-based procedures to establish a reasonable belief that they know each customer’s true identity. Crucially for markets, regulators say most secondary-market activity should not trigger customer identification requirements. The CIP obligations would apply mainly to direct issuer-to-customer relationships, such as issuance, redemption, custody, reserve management, or other authorized services. The proposal also states that merely holding or transferring a payment stablecoin typically does not create an account relationship with the issuer. Comments are accepted for 60 days after publication in the Federal Register. The move follows prior NCUA proposals on operational and risk-management standards for payment stablecoins and comes amid political debate over how state regulators can certify frameworks under GENIUS Act.