Federal Reserve Proposes Identity Verification Rules for Stablecoin Issuers on June 18

According to the Federal Reserve, the OCC, FDIC, and NCUA, the four agencies released a regulatory proposal on June 18 (U.S. local time) requiring licensed payment stablecoin issuers (PPSI) to verify customer identity during issuance and redemption. The proposed Customer Identification Program (CIP) obligations would apply standards similar to traditional banks and securities firms, requiring issuers to collect customer names, dates of birth, addresses, and identification numbers before account opening, with information retained for five years after account closure.

The CIP requirements apply only to primary market activities—direct issuance and redemption—and do not extend to secondary market transactions using smart contracts. The agencies will collect public comments for 60 days before finalizing the rule. Federal Reserve Vice Chair Michael Barr stated the current regulatory framework insufficiently addresses money laundering risks in secondary market trading.