Blockchain Association urges Treasury to limit GENIUS Act stablecoin ID rules to primary markets

The Blockchain Association has urged five federal agencies, including FinCEN and the Federal Reserve, to limit proposed GENIUS Act customer identification program (CIP) rules to primary-market transactions. In an August 21, 2026 comment letter, the group argued that extending identity checks to secondary-market peer-to-peer transfers exceeds statutory authority and is technically unfeasible. The proposed rules, issued in June 2026, would require stablecoin issuers to collect customer names and identification numbers, taking effect 12 months after finalization.

GENIUS Act CIP rulemaking

• ▪The Blockchain Association submitted a 15-page comment letter on August 21, 2026, to five federal agencies regarding proposed customer identification program requirements for stablecoin issuers.
• ▪The joint customer identification program rule was proposed in June 2026 by FinCEN, the OCC, the Federal Reserve Board, the FDIC, and the NCUA to implement the GENIUS Act.
• ▪The proposed rule requires permitted payment stablecoin issuers to collect a customer's name, address, date of birth or formation, and identification number before opening an account.

Primary market scope limitation

• ▪The Blockchain Association supports limiting customer identification program obligations to primary-market relationships where a stablecoin issuer interacts directly with a customer through issuance, redemption, conversion, or custody.
• ▪The Blockchain Association requested exclusions from the definition of an account for one-off redemptions by non-account holders and vendor or service-provider relationships.

Secondary market exclusion argument

• ▪Federal agencies estimated in their proposal that approximately 99% of stablecoin transaction activity occurs in secondary markets.
• ▪The Blockchain Association argued that extending customer identification requirements to secondary-market transfers exceeds what is authorized under the GENIUS Act at 12 U.S.C. § 5903(a)(5)(A)(v).

Smart contract technical constraints

• ▪The joint agency proposal's preamble states that smart contract interactions do not currently provide stablecoin issuers with the information needed to verify identities, describing such obligations as nearly impossible.
• ▪The Blockchain Association argued that stablecoin issuers cannot observe peer-to-peer transfers because transactions are executed by smart contracts without the issuer's involvement, knowledge, or pre-settlement approval.

Regulatory compliance timeline coordination

• ▪The Blockchain Association requested that the compliance date for the customer identification rule match the compliance date of the separate FinCEN and OFAC anti-money laundering and sanctions rulemaking published on April 10.
• ▪The proposed customer identification program rule would take effect 12 months after a final rule is issued, while the wider GENIUS Act framework begins restricting unlicensed payment stablecoin issuance on January 18, 2027.