Blockchain Association backs Treasury's proposed GENIUS Act rules for stablecoin issuers

The Blockchain Association has filed a letter in support of several U.S. federal agencies' joint proposed rules for stablecoin issuers under the GENIUS Act, a landmark stablecoin framework signed into law last year. 

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

The GENIUS Act sets out rules deciding who can issue payment stablecoins, what those tokens must be backed by, and how holders can redeem them. Specifically, the act requires permitted payment stablecoin issuers (PPSIs) to maintain an effective customer identification program (CIP).

The association said in the letter that it backs limiting customer identification requirements to direct issuer-customer transactions in the primary market. That means that everyday peer-to-peer transactions on secondary markets would fall outside the stablecoin issuers' CIP obligations.

"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."

Clearer definitions

The industry group also called for clearer definitions of "account," "customer," and "digital asset service provider." For example, it recommended excluding one-off redemptions and activities unrelated to stablecoins.

It also urged the agencies to avoid duplicative compliance requirements and clearly state that stablecoin issuers should have flexibility in their approaches to verifying client information.

The letter suggested that the agencies coordinate the effective date of the proposed CIP rules with separate but related anti-money laundering rules to be implemented under the GENIUS Act.

"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."