Blockchain Association backs stablecoin ID scope, seeks clearer account rules

The Blockchain Association supports the core of a proposed US customer-identification rule for payment stablecoin issuers, but wants clearer definitions of which relationships count as issuer accounts. In its August 21 comment letter, the group defended the proposal’s existing limit to direct issuer-customer relationships. It did not ask regulators to create that limit from scratch.

The June 22 proposed rule would implement the GENIUS Act’s customer-identification requirement for permitted payment stablecoin issuers. It is not yet a final rule. The agencies distinguish direct activity, such as issuing or redeeming a stablecoin, from later transfers between third parties. Under the proposal, a transfer that involves the issuer only through its smart contract does not, by itself, create the kind of customer account covered by this identification program.

Where the group wants changes

The association asks the agencies to make several boundaries explicit. A one-off redemption by a holder, a vendor’s technical services, and a separate non-stablecoin business should not automatically become issuer accounts under this specific program, it argues. The letter also asks for clearer rules on relying on another regulated institution’s identity checks. These are requests for clarification or revisions to the proposal, not rules already adopted.

Identity records and privacy tools

For direct customers, the proposal calls for identifying information including a name, date of birth or formation, address, and identification number. It would keep that identifying information for five years after an account closes. Records describing how identity was verified would be kept for five years after each record is made. Those are different retention clocks.

The association supports flexibility in verification methods, including the possible use of zero-knowledge proofs. Such tools could help confirm a required fact without transmitting the underlying personal data in that step. The letter does not say they are automatically approved or remove an issuer’s obligation to verify its direct customers.

What happens next

The association wants the final identification rule’s effective date aligned with a separate proposed anti-money-laundering and sanctions rule for stablecoin issuers. The agencies must consider comments before finalizing the requirements. For now, the key distinction is between the direct issuer account this proposal covers and secondary-market transfers it already leaves outside this particular identification program.