Blockchain Association seeks limits on stablecoin KYC requirements

The Blockchain Association has submitted comments to five U.S. federal agencies regarding proposed customer identification requirements for permitted payment stablecoin issuers under the GENIUS Act. The industry group is advocating for a clear distinction between an issuer’s direct customers and secondary-market users.

While supporting the goal of preventing illicit digital asset use, the association argues that identity requirements should only apply to direct relationships, such as during the issuance or redemption of stablecoins. They contend that peer-to-peer (P2P) transfers occurring after issuance should not create new customer-identification obligations for the original issuer.

The proposed framework, jointly introduced by FinCEN, the Office of the Comptroller of the Currency, the Federal Reserve, the FDIC, and the National Credit Union Administration, aims to establish risk-based identification programs. Under the current timeline, the GENIUS Act is expected to begin restricting unlicensed stablecoin issuance in the U.S. on January 18, 2027.