US Regulators Push Bank-Like ID Checks for Stablecoin Issuers

The GENIUS Act treats permitted payment stablecoin issuers as financial institutions under the Bank Secrecy Act and requires them to maintain customer identification programs, or CIPs. The policy challenge is determining when a customer relationship begins after a token leaves the issuer and moves through exchanges, custodial or self-hosted wallets, and other intermediaries — a decision that could reshape compliance costs across the stablecoin market.

FinCEN, the Federal Reserve, FDIC, OCC and NCUA jointly proposed the rule on June 18, 2026, with public comments due by Aug. 21. Crypto industry groups urged regulators not to make ordinary wallet-to-wallet transfers subject to issuer-level KYC, while seeking clearer treatment of exchanges, custodial and non-custodial wallets, third-party providers and direct redemptions. The agencies must also decide whether an issuer may rely on identity checks performed by another regulated institution. No final rule or effective date has been set.

Stablecoins typically maintain their value through assets denominated in U.S. dollars and have become an important dollar channel for crypto trading and cross-border payments. The United States signed the GENIUS Act into law on July 18, 2025, establishing a federal issuance framework for the first time. It requires every $1 token to be backed by at least $1 in eligible reserve assets. Stablecoins, however, are not bank deposits and are not covered by FDIC deposit insurance.

The FDIC board approved a proposed rule on April 7, 2026, and published it in the Federal Register on April 10. The proposal would require issuers under its supervision to meet standards covering reserve assets, redemption within two business days, capital, risk management and custody. The OCC issued its own proposal on February 25, followed by customer identification rules proposed by five federal agencies on June 18. Final rules had yet to be issued by the July 18 statutory deadline.

Stablecoins maintain their value through assets such as the US dollar but can move rapidly across decentralized networks, making them a focus of concerns over money laundering and sanctions evasion. President Donald Trump signed the GENIUS Act on July 18, 2025, bringing PPSIs within the Bank Secrecy Act’s definition of financial institutions. A state-level regulatory pathway generally applies to issuers with no more than $10 billion in circulation.

The Treasury Department’s FinCEN and OFAC issued a joint proposal on April 8, 2026, requiring PPSIs to establish risk-based AML/CFT and sanctions compliance programs, retain records, report suspicious transactions, and maintain the technical capability to block and freeze illicit transactions. Comments are due June 9, and the final rules are intended to take effect 12 months after publication. On June 18, FinCEN joined the OCC, Federal Reserve, FDIC and NCUA in proposing customer identification rules.

The New York State Department of Financial Services established a state-level framework for U.S. dollar stablecoins in June 2022, requiring full reserves, redemption rights and independent attestations. After the U.S. GENIUS Act was signed into law on July 18, 2025, state regimes must be substantially consistent with federal standards, a requirement that will determine whether licensed issuers including Circle, Paxos and Gemini can continue operating.

NYDFS unveiled the proposal on June 9, 2026, opening a 10-day pre-proposal comment period to be followed by a 60-day consultation after formal publication. The rules would limit reserve concentration with any single custodian and cover seven categories of risk management, including internal controls, cybersecurity and internal audits. Issuers with $25 billion in circulation would have to hold at least 0.5% of reserves in safeguarded deposits each day, capped at $500 million. The rules would take effect alongside the GENIUS Act, with existing operators receiving a 12-month transition period.

Stablecoins use fiat currency reserves to maintain their value and have gradually become a settlement tool for payments and crypto markets. The United States enacted the GENIUS Act on July 18, 2025, generally allowing only qualified issuers to issue stablecoins domestically. The law brings reserves, redemptions, capital and oversight under a federal framework, affecting market access for banks, nonbank firms and foreign issuers.

The Office of the Comptroller of the Currency proposed rules on February 25, 2026, covering reserve assets, custody, redemptions, risk management, audits, registration and capital backing. The comment period runs through May 1. The following day, Comptroller Jonathan Gould testified before the Senate Banking Committee alongside officials from the Federal Reserve and FDIC, with stablecoins and digital assets emerging as key regulatory topics.