The Federal Reserve and the Treasury Department have proposed a new rule that would require stablecoin issuers to verify the identities of their customers, bringing the digital currency sector closer to the standards banks already follow. The proposal, introduced under the GENIUS Act, is now open for public comment.
Aligning stablecoins with bank rules
Under the proposed rule, stablecoin companies would need to implement customer identification programs similar to those used by traditional financial institutions. That means collecting and verifying personal information from users, much like a bank does when opening an account. The aim is to prevent fraud and illicit activity in the rapidly growing stablecoin market.
What the GENIUS Act brings
The rule is part of the broader GENIUS Act, a piece of legislation aimed at regulating digital assets. While details of the full act are not yet public, this specific proposal targets the identity verification gap that currently exists between stablecoins and regulated banks. The agencies argue that without such standards, stablecoins could be used for money laundering or other financial crimes.
Public comment period begins
The proposal is not yet final. The Federal Reserve and Treasury have opened a public comment period, inviting feedback from industry participants, consumer advocates, and the general public. The comment window allows stakeholders to weigh in on the specifics of the identification requirements before the rule is finalized.
The agencies have not yet set a deadline for finalizing the rule, but the comment period is now underway.
