Comment Letters on the Stablecoin ID Rule Ask Where an Account Ends

The comment round on the first US customer identification rule for stablecoin issuers closed on 21 August, and the two letters filed that day read alike. FinCEN and four banking regulators want permitted payment stablecoin issuers to identify the people who open accounts with them, keep the records for five years, and check the names against federal watch lists. The proposal already says the duty stops at the primary market. Two industry letters spend most of their length asking the agencies to say it again in the rule text, in words an examiner cannot stretch.

What the proposal would require

Before opening an account, an issuer would collect a name, a date of birth or of formation, a physical address, expressly not a PO box, and an identification number. Verification can be documentary, meaning a government-issued ID, or non-documentary, such as a database check. Identifying records are held five years after an account closes, verification records five years after they are made. Issuers would also count as financial institutions under the Bank Secrecy Act, the main US anti-money-laundering statute.

The proposal is joint. FinCEN, the Office of the Comptroller of the Currency, the Federal Reserve Board, the FDIC and the National Credit Union Administration all signed the same text, each under its own docket number. FinCEN announced it on 18 June. The Federal Register published it four days later. Comments were due by 21 August.

Where the account stops

The definitions carry the regime. An account is a formal relationship set up to provide issuance, redemption, reserve management or custodial services. It excludes purely secondary market activity, and holding an issuer's tokens without other signs of a formal relationship. A customer excludes anyone who acquires or redeems a stablecoin other than directly from or to the issuer. Where the interaction runs only through a smart contract, meaning code running on a public chain, nothing attaches.

That perimeter matters because of where the volume sits. One report of the rulemaking puts about 99% of stablecoin transaction activity in secondary markets, attributed to the regulators' own estimates. The figure appears in that account alone.

Two letters, one ask

The Blockchain Association supports the primary-market limit and wants it nailed down.

"They should not extend to downstream, peer-to-peer stablecoin transactions," the association said of the identification duties.

Its other requests are housekeeping with teeth. It wants clearer definitions of account, customer and digital asset service provider; carve-outs for one-off redemptions and non-stablecoin activity; rules on when an issuer may rely on a check someone else ran; and effective dates lined up with the related anti-money-laundering rules. The timing of the letter is reported two ways. The Block, publishing Tuesday, says the association filed on Friday, the deadline day. crypto.news and The Cryptonomist put the deadline on the same date but say the association made its position public on 24 August. One is describing a filing and the other an announcement. Neither says so.

The bank side filed the same day and asked for much the same thing. The Bank Policy Institute and The Clearing House Association want explicit guidance on relationships formed through secondary-market intermediaries, on direct redemptions, and on how the two definitions interact. Their letter describes its recommendations as an attempt at "reducing interpretive uncertainty and facilitating effective implementation".

The clock behind the clock

This is not the rule deciding who may issue a stablecoin at all. That one is separate, and newer: Treasury's section 3 proposal from 17 August, which defines issuance and sale and is still inside its own comment window. The identification rule sits under it, on the compliance layer, and binds nobody until a final text exists.

The date the industry works back from is 18 January 2027, when the GENIUS Act's restrictions on unlicensed issuance begin. On a twelve-month implementation period, a rule finalised now would not bite until after that. The Bank of England moved faster on its own question, setting a cap on any systemic sterling stablecoin in June. What the agencies do with these letters will show in the next document. No date for it has been published.