The Federal Reserve and four other U.S. financial regulators proposed new customer identification requirements for certain payment stablecoin issuers on June 18. The proposal marks the Fed's first formal rulemaking tied to the GENIUS Act, the landmark stablecoin law signed by President Donald Trump in July 2025. The requirements are designed to strengthen anti-money laundering safeguards, improve customer verification procedures, and help combat illicit finance involving payment stablecoins. The proposal applies only to stablecoin issuers authorized under the GENIUS Act framework, including certain bank subsidiaries, federally approved nonbank issuers, and qualified state-regulated firms.
Federal Reserve Proposes Customer Identification Requirements for Stablecoin Issuers
Under the proposal, certain payment stablecoin issuers would be required to maintain customer identification programs similar to those used by banks and credit unions. The rule was issued jointly by the Fed, the Financial Crimes Enforcement Network, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the National Credit Union Administration. Regulators will accept public comments for 60 days after the proposal is published in the Federal Register.
Kevin Warsh Abstains from Federal Reserve Stablecoin Proposal Vote
Kevin Warsh abstained from the vote less than a month after taking over as Fed chair. Custodia Bank CEO Caitlin Long noted that "the Fed joined this one" and described it as "the Fed's first GENIUS rulemaking." Long later said, "Warsh's abstention from this vote is unusual & he gave no explanation." Fed Governor Michael Barr said he supports the proposal but remains concerned that the GENIUS Act framework may not fully address illicit finance risks in secondary-market stablecoin transactions. "I remain concerned, however, that the GENIUS Act regulatory framework does not do enough so far to address the risks of illicit finance conducted through secondary market transactions in payment stablecoins," Barr said. He added that he would review feedback on whether parts of the customer identification framework should be extended to secondary-market activity and assess whether additional safeguards may be needed.
FAQ
What did the Federal Reserve propose on June 18?
The Federal Reserve and four other U.S. financial regulators proposed new customer identification requirements for certain payment stablecoin issuers on June 18. The proposal marks the Fed's first formal rulemaking tied to the GENIUS Act.
Why did Kevin Warsh abstain from the Federal Reserve stablecoin proposal vote?
Kevin Warsh abstained from the vote less than a month after taking over as Fed chair. Custodia Bank CEO Caitlin Long noted that Warsh's abstention is unusual and that he gave no explanation for his decision.
What concerns did Fed Governor Michael Barr express about the GENIUS Act?
Fed Governor Michael Barr said he supports the proposal but remains concerned that the GENIUS Act framework may not fully address illicit finance risks in secondary-market stablecoin transactions. He stated he would review feedback on whether additional safeguards may be needed.
