Blockchain Association urges tailored KYC rules for stablecoin issuers

The Blockchain Association fired off a comment letter to federal regulators on August 21, pushing back on the scope of proposed know-your-customer rules for stablecoin issuers. The core argument: if someone buys a stablecoin on a decentralized exchange through a smart contract, the issuer shouldn’t be on the hook for identifying them. The letter responds to a joint proposed rule from FinCEN, the Federal Reserve, and other federal agencies that would establish customer identification program (CIP) requirements for permitted payment stablecoin issuers, or PPSIs, under the GENIUS Act. That legislation, signed on July 18, 2025, represents the first comprehensive federal framework for payment stablecoins in the US. Primary market only, please The Blockchain Association isn’t fighting the concept of KYC for stablecoin issuers. It endorsed the proposed rule in broad strokes. Where it draws the line is how far those obligations should extend. Under the proposed framework, CIP requirements are modeled on existing bank obligations. Issuers would need to collect a customer’s name, date of birth, address, and identification number. Records would need to be retained for five years after an acco...