U.S. Proposes New Customer ID Rules for Stablecoins Under GENIUS Act

Regulators want to require stablecoin issuers to identify customers, with extra focus on secondary markets. The consultation could further shape the scope of the new rules.

Key Takeaways

• U.S. regulators are proposing new rules that would require stablecoin issuers to identify customers, similar to banks.
• The rules are part of the GENIUS Act rollout, which was passed in July 2025 and introduces strict reserve requirements for stablecoins.
• The Federal Reserve is also asking for feedback on customer identification in secondary markets, while the move could matter for European regulation.

The U.S. Federal Reserve, the Treasury Department, and other financial regulators have published a proposal for new rules that would require stablecoin issuers to identify their customers, similar to the requirements that apply to banks. This move is part of the rollout of the GENIUS Act, the first major federal law to bring stablecoins under U.S. financial regulation.

Background on the GENIUS Act

The GENIUS Act, which was passed in July 2025, creates a broad regulatory framework for payment stablecoins in the United States. The law defines "permitted payment stablecoin issuers" (PPSIs) as the approved entities allowed to issue stablecoins, including subsidiaries of insured depository banks and nonbank issuers licensed by the OCC. The law also sets strict reserve requirements for stablecoin issuers, such as 1:1 backing with high-quality assets like cash, bank deposits, and short-term U.S. Treasury bills. The goal is to make stablecoins more transparent and solvent.

New Customer ID Requirements and Concerns About Secondary Markets

The proposed rules would require stablecoin issuers to use customer identification procedures under the Bank Secrecy Act, just like traditional financial institutions. The idea is to help fight money laundering, illegal financing, and terrorist financing. While established crypto issuers like Tether and Circle are already active, competition is also growing as traditional financial firms enter the space.

One point of debate inside the Federal Reserve is whether the identification requirements should also apply to stablecoin transactions in secondary markets. Fed Governor Michael Barr raised concerns that the current proposals may not be enough to stop illegal activity through these secondary markets. The consultation explicitly asks for feedback on whether customer identification should be expanded to secondary market activity, weighing the pros and cons.

Relevance for the European Crypto Market

This development in the U.S. could also matter for European crypto investors and companies, since it shows how major jurisdictions are tightening stablecoin rules. European regulators are following similar debates around transparency and customer identification. The outcome of the U.S. rules could therefore help shape future European legislation and market practices around stablecoins.