Blockchain Association Warns Regulators Against Expanding Stablecoin KYC Requirements

The Blockchain Association has sent a letter to federal regulators urging them to keep identity checks limited to direct relationships between stablecoin issuers and their customers. The association is warning that extending these requirements to peer-to-peer transfers could 'cripple the industry.'

The GENIUS Act, signed into law in June last year, establishes a framework for the legal issuance and use of stablecoins in the United States.

The proposed federal rules would require stablecoin issuers to verify the identities of direct customers under requirements similar to the Bank Secrecy Act. However, the Blockchain Association argues that these checks should not extend to wallet-to-wallet transfers, one-off redemptions, technology providers, or an issuer's unrelated businesses.

The association is also seeking protections for issuers that rely on regulated financial institutions to perform identity checks.