BPI Demands ID Checks for Stablecoin Secondary Markets

The Bank Policy Institute (BPI), representing major banks like JPMorgan and Bank of America, has submitted a comment letter to FinCEN's proposed rule on Permitted Payment Stablecoin Issuer Customer Identification Program. The BPI suggests extending the Customer Identification Program (CIP) provisions to exchanges and platforms that interact directly with retail customers, but are not under the current oversight.

The group argues that these organizations play a significant role in the payment stablecoin ecosystem and facilitate a substantial portion of stablecoin purchases and sales, where most illicit activity involving stable assets takes place. The BPI recommends specifying that exchanges and platforms establishing account relationships with customers to facilitate stablecoin activity are subject to CIP requirements under the Bank Secrecy Act (BSA).

However, the proposed rule acknowledges that decentralized exchanges, often referred to as 'various types of decentralized market participants,' would also be included in secondary market oversight. It notes that for secondary market customers trading stablecoins on the blockchain itself, identities are often anonymous or pseudonymous.