US Regulators Move to Require Bank-Style Customer ID Checks for Stablecoin Issuers
US financial regulators have proposed new rules under the GENIUS Act that would require stablecoin issuers to adopt customer identity verification practices similar to those banks follow under federal law. The plan is designed to strengthen Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) safeguards across the stablecoin sector.
A joint notice of proposed rulemaking from the Federal Deposit Insurance Corporation (FDIC), Federal Reserve, Office of the Comptroller of the Currency (OCC), National Credit Union Administration, and the Treasury Department's Financial Crimes Enforcement Network (FinCEN) would require issuers to run customer identification programs for people seeking to "open an account." Those programs would include verifying identity, keeping associated records, and screening whether an individual is suspected of terrorist ties.
The agencies said the proposal is part of implementing the GENIUS Act, which was signed into law in July 2025. The notice was released Thursday and is expected to be filed for publication in the Federal Register, triggering a formal public comment process.
At the core is an approach modeled on the Bank Secrecy Act framework, which sets minimum standards for regulated financial institutions to identify customers, retain documentation, and assess possible connections to terrorism or terrorist organizations. For stablecoin issuers, regulators are signaling that onboarding and verification processes should increasingly resemble traditional financial onboarding from an AML/CFT standpoint, even if stablecoin issuance and transfers operate differently than banks.
Regulators' focus reflects GENIUS' broader aim to establish a clearer compliance pathway for stablecoin activity in the US, starting with "know your customer" controls that support ongoing monitoring and reporting. The identity and recordkeeping requirements could reshape onboarding workflows, documentation obligations, data retention practices, and audit readiness.
The proposal follows other GENIUS-related actions. Treasury has already put forward AML and CFT measures tied to illicit finance, and earlier FDIC guidance indicated that insurance coverage for corporate deposits held by stablecoin issuers would not extend to stablecoin holders, highlighting that agencies are using multiple policy tools rather than a single unified framework.
The agencies set a 60-day public comment period beginning after the rule is filed in the Federal Register on Monday. Stakeholders are expected to weigh in on the scope of identity verification, the operational burden on issuers, and the compliance timeline.
GENIUS implementation is expected to take effect 18 months after passage, or within 120 days after final regulations are issued, whichever occurs first. That schedule could push issuers to start planning even while the rules remain open for comment, especially if systems need to be redesigned to support customer identification and documentation.
As stablecoin rulemaking advances, broader crypto legislation remains unsettled. Congress is still debating the Digital Asset Market Clarity (CLARITY) Act, a proposal intended to reshape how agencies define and enforce crypto rules. Prior reporting suggested some in the White House and Congress expected movement before the August recess, but Democratic concerns about potential conflicts of interest involving lawmakers and elected officials could slow progress.
Market participants will be watching for the Federal Register filing and how final requirements define verification and recordkeeping in real-world onboarding. Investors are also tracking whether CLARITY advances, since overlapping regulatory frameworks could influence how stablecoins and other digital assets are governed in the coming years.
