The Federal Reserve on Thursday proposed that payment issuers of stablecoins maintain written customer identification programs, a move that signals Washington’s determination to subject digital asset markets to the same anti-money laundering regime long applied to traditional banks — even as regulators race to finalize rules before a legal deadline next January.
the an offer It will require so-called permitted payment stablecoin issuers, or PPSIs, to collect from each new customer their legal name, date of birth or configuration, physical address and government-issued identification number before opening an account.
The Federal Reserve’s framework reflects the CIP Commitments Under which banks, brokers, mutual funds and futures traders have operated for more than two decades. Organizers will receive public comments on the proposal for 60 days.
The Fed’s action follows a wave of rulemaking initiated by the Federal Reserve The law of genius – Officially, the US Stablecoins National Innovation Guidance and Establishment Act – issued by President Trump I fell Into law in July 2025.
This landmark legislation created the first federal regulatory regime for stablecoins, mandating 100% reserve backing with liquid assets and subjecting issuers to the Bank Secrecy Act for the first time.
The law requires stablecoin issuers to establish effective anti-money laundering, sanctions compliance, and customer identification programs. The Genius Act becomes effective on the earlier of January 18, 2027, or 120 days after initial federal regulators issue final implementing rules.
Federal Reserve Governor warns against stablecoins
Federal Reserve Governor Michael Barr has emerged as the most cautious voice within the regulatory apparatus, even as his colleagues embrace digital assets with a new openness. Speaking in March at the Federal Reserve Society conference in Washington, Barr warned that stablecoins face material risks around reserve asset quality, regulatory arbitrage, anti-money laundering loopholes, and financial stability — concerns he said the basic text of the Genius Act could not resolve on its own.
“While some digital asset service providers are subject to AML/CFT requirements in their jurisdictions, it is very easy for bad actors to evade these restrictions and operate undetected when dealing in digital assets,” Barr said in a statement on Thursday.
Barr, who previously served as the Fed’s top cop, emphasizes that detailed rulemaking remains the critical tool for translating the intent of the law into enforceable protections.
Thursday’s proposal is the latest in a dense series of rulemakings from multiple agencies. In April 2026, the Financial Crimes Enforcement Network of the Department of the Treasury and OFAC was unveiled. Issued A joint proposed rule would require private sector organizations to adopt written anti-money laundering and counter-terrorism financing programs and a full sanctions compliance framework.
This rule would remove PPSIs from the existing financial services business category and treat them as a distinct class of BSA-covered financial institutions — a major structural change, given FinCEN’s finding that nearly half of known stablecoin issuers did not register as stablecoin financial institutions at all.
The FDIC and OCC each issued their own Notices of Proposed Rulemaking in parallel, covering licensing, reserves, capital requirements, and redemption standards. The CIP proposal announced Thursday are separate and complementary rules to the anti-money laundering and sanctions rules.
Stablecoin rules and nuances
The proposed client identification requirements carry technical nuances tailored to stablecoin markets. Unlike banks, PPSI can face direct redemption requests from token holders who acquired the coins on the secondary market rather than through a direct issuance relationship.
The proposal addresses this by defining “account” to include this redemption event, meaning that an individual who acquires a stablecoin on an exchange and later redeems it directly with the issuer would trigger CIP obligations at the moment of this interaction.
Pure secondary market transactions in which PPSI is not a direct counterparty – including transfers conducted via a smart contract – would not constitute an account relationship under the proposed framework.
The timeline for finalization is tight. With the effective date of the GENIUS Act potentially arriving as early as 120 days after agencies publish their final rules, the window for comment, review, and adoption is compressed. Final CIP rules are not expected before 2027, meaning the law could go into effect before the customer identification architecture is fully in place.
