Scope

2026

Stablecoin

would

Identity

<h2 id="blockchain-association-pushes-back-on-broad-cip-scope">Blockchain Association Pushes Back on Broad CIP Scope</h2><p>The Blockchain Association has submitted formal comments on proposed customer identification program (CIP) requirements for stablecoin issuers under the GENIUS Act, calling on regulators to draw clearer lines around where compliance obligations begin and end.</p><p>At the centre of the group's concerns is the scope of the proposed rules. <cite>The CIP proposal uses "primary market" to describe direct interactions between a permitted payment stablecoin issuer (PPSI) and a user, covering activities such as issuing, converting, redeeming, and providing custody services.</cite> The Blockchain Association argues that compliance obligations should be focused squarely on those relationships, and should not extend further into the transaction chain.</p><p>Specifically, the group says that independent, peer-to-peer stablecoin transfers should remain outside an issuer's compliance obligations. <cite>Secondary market activity, which includes purchases through intermediaries, payments from self-hosted wallets, exchange transactions, and person-to-person transactions, does not directly involve the PPSI as a party.</cite> Treating issuers as responsible for monitoring those flows, the association argues, would impose disproportionate burdens without a clear legal basis.</p><h2 id="overlapping-rules-and-digital-identity-tools">Overlapping Rules and Digital Identity Tools</h2><p>The association also warned against layering duplicate compliance requirements across different regulatory frameworks. With multiple federal agencies, including FinCEN, the FDIC, the OCC, the Federal Reserve, and the NCUA, each running parallel rulemakings under the GENIUS Act, the risk of conflicting or overlapping obligations is real. <cite>Industry participants have separately flagged that requirements applying to PPSIs should be identical across agency rulemakings to prevent regulatory arbitrage.</cite></p><p>On the verification side, the Blockchain Association called on regulators to allow modern digital identity tools for customer onboarding. <cite>The proposed CIP framework requires risk-based procedures to verify each customer, with verification methods that may be documentary, non-documentary, or a combination depending on risk.</cite> The association's position is that new digital identity technologies should be explicitly permitted as valid verification methods, rather than defaulting solely to traditional document-based processes.</p><p>The comments arrive at a critical moment for GENIUS Act rulemaking. <cite>Congress enacted the GENIUS Act in July 2025 to provide regulatory clarity for payment stablecoins, with the goal of facilitating U.S. dollar-backed stablecoin development while mitigating risks to users and the financial system.</cite><cite>A July 2026 statutory deadline for finalising the rules passed without a coordinated final package from the agencies involved, with comment windows on major proposals extending into August 2026.</cite></p><p><strong>Sources:</strong><br><a href="https://www.fdic.gov/federal-register-publications/blockchain-association-ashok-pinto-rin-3064-ag19.pdf" rel="noopener noreferrer nofollow">Blockchain Association comment letter to FDIC on GENIUS Act CIP requirements (FDIC.gov)</a><br><a href="https://www.federalregister.gov/documents/2026/06/22/2026-12460/permitted-payment-stablecoin-issuer-customer-identification-program" rel="noopener noreferrer nofollow">Federal Register: Permitted Payment Stablecoin Issuer Customer Identification Program</a><br><a href="https://www.sullcrom.com/insights/memo/2026/June/Agencies-Propose-Customer-Identification-Program-Requirements-Stablecoin-Issuers" rel="noopener noreferrer nofollow">Sullivan and Cromwell: GENIUS Act CIP Proposed Requirements Analysis</a></p>

GENIUS Act Rules Face Call For Clearer Stablecoin Boundaries

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