Blockchain Association backs Treasury's GENIUS Act stablecoin rules

The Blockchain Association filed a letter supporting federal agencies' joint proposed rules for stablecoin issuers under the GENIUS Act, the industry group announced Monday, The Block reported.

The Blockchain Association is a Washington-based trade group representing crypto exchanges, custodians, and other digital asset companies, and it regularly submits comment letters on federal rulemakings that touch the industry. This submission targets one of the first major rulemakings to test how the GENIUS Act's compliance requirements will work in practice.

The association submitted the comment letter Friday in response to rules proposed by Treasury's Financial Crimes Enforcement Network, the Office of the Comptroller of the Currency, the Federal Reserve, the Federal Deposit Insurance Corporation, and the National Credit Union Administration. Comments on the proposal closed Aug. 21.

The GENIUS Act, signed into law last year, sets out rules deciding who can issue payment stablecoins, what those tokens must be backed by, and how holders can redeem them, extending a rulemaking process we've tracked since these same five agencies faced their first deadline. The act requires permitted payment stablecoin issuers, or PPSIs, to maintain an effective customer identification program, the same kind of check banks run before opening an account.

The core of the association's letter is where that identification requirement should stop. The group backs limiting customer identification requirements to direct issuer-customer transactions in the primary market, meaning everyday peer-to-peer transactions on secondary markets would fall outside stablecoin issuers' CIP obligations. That distinction matters in practice: an issuer minting or redeeming tokens directly with a client looks like a traditional financial relationship, while someone buying the same stablecoin from another user on an exchange never gives the issuer a chance to identify them at all.

“BA also strongly supports the proposal's decision to limit CIP obligations to primary-market relationships in which a PPSI interacts directly with a customer, rather than attempting to impose customer-identification obligations across downstream secondary-market activity.”

— Blockchain Association

The group also called for clearer definitions of "account," "customer," and "digital asset service provider," recommending regulators exclude one-off redemptions and activities unrelated to stablecoins from those definitions. It urged the agencies to avoid duplicative compliance requirements and to state plainly that issuers should have flexibility in how they verify client information, rather than being locked into one prescribed method.

• Filed: comment letter submitted Friday, announced Monday
• Target: joint proposed CIP rules from FinCEN, OCC, the Federal Reserve, FDIC, and NCUA
• Comment period: closed Aug. 21
• Core ask: limit customer ID checks to primary-market issuer-customer transactions
• Other asks: clearer definitions, no duplicative compliance, flexible verification methods

The letter also suggested the agencies coordinate the effective date of the proposed CIP rules with the separate anti-money-laundering rules still to come under the GENIUS Act, so issuers aren't forced to build compliance systems twice on two different timelines. "The GENIUS Act created a landmark framework for payment stablecoins," the Blockchain Association wrote in a thread of posts on X. "Implementation should preserve its goals: strong safeguards, workable rules, and room for continued innovation."

This piece is informational, not a recommendation to buy, sell, or hold any asset.