The Blockchain Association has backed key parts of proposed federal customer identification rules for stablecoin issuers under the GENIUS Act, while calling for clearer definitions and better coordination across related compliance requirements.
In a comment letter submitted on August 21, the crypto industry group responded to a joint proposal from the Treasury Department’s Financial Crimes Enforcement Network, the Office of the Comptroller of the Currency, the Federal Reserve, the Federal Deposit Insurance Corporation and the National Credit Union Administration.
The proposed rules would implement customer identification program requirements for permitted payment stablecoin issuers under the GENIUS Act, which was signed into law in 2025.
Key Takeaways
- The Blockchain Association supports limiting stablecoin customer identification requirements to direct issuer customer relationships in the primary market.
- Peer-to-peer transfers and other secondary market activity would generally fall outside those obligations under the approach it supports.
- The group wants clearer definitions of terms including “account,” “customer” and “digital asset service provider.”
- It is urging regulators to avoid duplicative compliance requirements and allow flexibility in how issuers verify customers.
- The association also wants the CIP rules implemented on a timeline coordinated with separate anti-money laundering requirements under the GENIUS Act.
Association Supports Primary Market CIP Rules
The GENIUS Act requires permitted payment stablecoin issuers, or PPSIs, to maintain effective customer identification programs. The main issue addressed by the proposed rule is how broadly those identification obligations should apply.
The Blockchain Association said it supports restricting the requirements to primary market relationships where a stablecoin issuer interacts directly with a customer, such as when issuing or redeeming tokens through an established account relationship.
“BA also strongly supports the proposal’s decision to limit CIP obligations to primary-market relationships in which a PPSI interacts directly with a customer, rather than attempting to impose customer-identification obligations across downstream secondary-market activity.”
Under that approach, everyday peer-to-peer transfers occurring after stablecoins have entered circulation would generally not create new identification obligations for the issuer. The association argued that issuers often do not control, custody or intermediate those secondary market transfers and may not know the parties involved.
Group Calls for Clearer Regulatory Definitions
Although the association broadly supports the proposal, it asked regulators to refine several definitions before adopting a final rule. The group highlighted the terms “account,” “customer” and “digital asset service provider” as areas where greater precision is needed. It recommended that one-off redemptions, activities unrelated to stablecoins and certain service provider relationships not automatically be treated as customer relationships under the rule.
The concern is that overly broad definitions could pull transactions into the CIP framework even where an issuer does not have the kind of ongoing customer relationship contemplated by the GENIUS Act.
The association also argued that regulators should avoid creating duplicative obligations across overlapping regulatory regimes.
Stablecoin Issuers Should Have Flexibility in Verification
The Blockchain Association also urged the agencies not to prescribe a single method for verifying customer information. Instead, it said permitted issuers should be allowed to use different verification approaches depending on their business models and risks. That could include electronic collection of customer data, reliance on other regulated institutions where appropriate and the use of digital identity tools.
The broader aim is to maintain strong controls against illicit finance while allowing issuers to build compliance systems suited to blockchain-based payment products rather than simply copying traditional banking processes.
Association Wants AML Timelines Coordinated
Another major recommendation concerns implementation timing. The Blockchain Association asked regulators to align the effective date of the customer identification rules with other anti-money laundering, counter-terrorist financing and sanctions related requirements being developed under the GENIUS Act. The group said coordinated implementation would reduce operational strain on stablecoin issuers that may otherwise need to build separate compliance systems on different timelines.
That request reflects a broader concern across the digital asset industry that fragmented rulemaking could increase costs and create inconsistent obligations even when the underlying policy goals are similar.
The association said the final framework should preserve the balance between compliance and innovation envisioned by the legislation.
“The GENIUS Act created a landmark framework for payment stablecoins. Implementation should preserve its goals: strong safeguards, workable rules, and room for continued innovation.”
Conclusion
The Blockchain Association’s response signals broad industry support for the federal government’s proposed approach to customer identification for stablecoin issuers, particularly its focus on direct relationships between issuers and customers. At the same time, the group is pushing regulators to narrow ambiguous definitions, preserve flexibility in verification methods and coordinate the rollout of CIP rules with wider anti-money laundering requirements.
The final rules will be important in determining how much compliance responsibility stablecoin issuers carry once tokens move beyond the primary market. If regulators adopt the approach supported by the association, issuers would face clear identification duties when dealing directly with customers without being made responsible for every downstream blockchain transfer involving their stablecoins.
