FinCEN issues Proposed rule for Customer Identification Requirements for Stablecoin Issuers

FinCEN, together with the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and National Credit Union Administration, have jointly proposed a rule to implement the GENIUS Act's directives treating permitted payment stablecoin issuers as financial institutions under the Bank Secrecy Act and requiring them to maintain effective customer identification programs. The proposal establishes minimum standards requiring PPSIs to collect and verify customer information (name, address, date of birth/formation, and identification numbers), maintain records for five years, compare customers against government terrorism lists, and provide customer notice of these identity verification requirements. Key Takeaways & Actions: Compliance Timeline: The rule would be effective 12 months after issuance of the final rule Comment Deadline: August 21, 2026 via regulations.gov Affected Parties: Estimated 50 PPSIs (approximately 60% would be bank subsidiaries; 40% standalone entities) Primary vs. Secondary Market: CIP requirements focus on primary market activity where PPSIs directly interact with customers for issuance and redemption, not secondary market transactions Estimated Cost: ~$1.65 million annually for PPSIs across compliance, recordkeeping, and verification activities Action Required: Stablecoin issuers should prepare documentation of identity verification procedures and customer information collection processes