The Federal Reserve on Thursday proposed new rules requiring U.S. crypto companies to screen stablecoin customers, a move backed by Chair Jerome Powell but not by fellow Fed governor Kevin Warsh, who abstained from the vote. The proposed rulemaking follows the passage of the GENIUS Act and marks the latest step in Washington's push to bring stablecoins under a formal regulatory framework.
Powell backs new stablecoin framework
Powell threw his support behind the proposal, which outlines how crypto firms must verify the identity of stablecoin users and conduct ongoing monitoring. The chair’s endorsement carries weight as the Fed moves to assert its authority over dollar-pegged digital assets, an area that has largely operated without federal oversight.
Warsh breaks with Fed chair
Kevin Warsh, who serves as Fed governor, abstained from the vote. His decision not to back the rulemaking signals internal disagreement over the scope or timing of the stablecoin rules. Warsh’s abstention means the proposal advanced without unanimous support, a rare public split on a major regulatory initiative.
Screening requirements for stablecoin customers
The proposed rule would require U.S. crypto companies to implement customer identification programs for stablecoin transactions. Firms would need to collect and verify personal information, screen against sanctions lists, and report suspicious activity — similar to obligations that banks already face. The rule aims to close gaps in anti-money laundering protections that have drawn scrutiny from lawmakers and regulators.
What comes next after the GENIUS Act
The rulemaking builds on the GENIUS Act, which Congress passed earlier this year. That law gave the Fed and other agencies a mandate to write specific stablecoin regulations. Thursday's proposal is the first concrete output from that mandate. The split between Powell and Warsh suggests that even within the Fed, the path to stablecoin regulation isn't unanimous — a dynamic that could shape the final rules.
