Blockchain Association Backs New Stablecoin Identity Rules While Defending P2P Privacy

The Aug. 21 comment window on a joint federal agency proposal closed with the Blockchain Association stepping into the ring, filing formal support for the core of the Customer Identification Program (CIP) framework for permitted payment stablecoin issuers under the GENIUS Act — while drawing a hard line against extending identity checks to peer-to-peer wallet transfers. The filing, directed at FinCEN, the OCC, the Federal Reserve, the FDIC, and the NCUA, crystallizes exactly where the industry's most consequential trade group will absorb compliance overhead and where it intends to fight for technical exemption.

The CIP perimeter, narrowed

Under the proposed regime, permitted payment stablecoin issuers would be required to maintain a written, risk-based customer identification program as part of their AML controls — collecting, at minimum, a customer's name, address, date of birth or formation, and identification number before account opening, with verification through documentary or non-documentary methods. The Association's central argument is jurisdictional: those obligations should attach only when the issuer itself holds a direct customer relationship through issuance, redemption, conversion, repurchase, or custody. Transfers flowing between users — including self-custody wallet-to-wallet movements, exchange-mediated swaps, merchant payments, and even transfers through an issuer's smart contract where the issuer does not intermediate, support, or approve the transaction — should remain outside the CIP boundary, classified as secondary-market activity. Federal regulators have estimated that roughly 99% of stablecoin transaction activity occurs in these secondary markets where issuers cannot identify token holders, a data point that makes the carve-out non-negotiable for the Association's compliance posture.

What institutional capital should price in

The Association is also pressing the agencies to adopt digital identity frameworks and interoperable verification tools, and to codify safe harbors that prevent redundant CIP checks when a bank, exchange, or other regulated institution has already completed the work — provided such reliance is reasonable, documented in contract, and backed by an annual certification from the upstream institution. The next inflection point is the agencies' final rulemaking, which will lock down the definitions of "account," "customer," and "digital asset service provider," followed by a 12-month transition window for issuers to come into compliance. For compliance teams at exchanges, custodians, and stablecoin issuers, the capital-allocation calculus is straightforward: budget now for the final perimeter, assume direct-customer flows will carry full CIP weight, and architect secondary-market workflows that survive without issuer-side identity capture — because the regulatory arbitrage window between proposal and effective rule is closing fast.