The Digital Chamber is directly impacting the rules taking shape in agencies implementing the GENIUS Act.
On June 22, FinCEN and the federal banking regulators proposed new Customer Identification Program (CIP) requirements for permitted payment stablecoin issuers (PPSIs). The proposal is the latest in a series of rulemakings implementing the GENIUS Act and would establish how stablecoin issuers identify and verify customers.
TDC directly impacted how the proposal has improved, as several provisions reflect policy recommendations from our earlier comments to FinCEN, OFAC, OCC, FDIC, and NCUA.
For example, TDC submitted extensive comments in June responding to FinCEN’s initial PPSI AML/CFT rulemaking and its broader BSA modernization proposal. A central theme of those submissions was that financial-crime obligations should follow the activities an entity actually performs.
- TDC argued that a stablecoin issuer should have BSA obligations when it directly serves a customer — for example, through issuance, redemption, custody, exchange, or transfer services — but should not be responsible for every downstream transaction simply because it issued the stablecoin being used.
- We also strongly urged FinCEN to preserve the distinction between financial intermediaries and technology providers. Developers, non-custodial software providers, node operators, APIs, and other neutral infrastructure should not be treated as financial institutions when they don’t accept or transmit value, nor exercise custody or control over customer assets.
- Finally, TDC encouraged FinCEN to modernize compliance by embracing privacy-preserving digital identity, verifiable credentials, blockchain analytics, AI, and other emerging Regulatory Technology tools.
Wins for Privacy and Safety
The new CIP proposal reflects significant movement toward that framework.
Most importantly, the Agencies propose limiting CIP information collection to primary-market customers who interact directly with the issuer, rather than attempting to impose CIP on secondary-market users. The proposal recognizes that issuers generally lack the customer information needed to identify downstream users and accordingly narrows the proposed customer definition.
The proposal also contains vital protections for developers and decentralized infrastructure. Its definition of “digital asset service provider” excludes distributed-ledger protocols, developers of self-custodial software interfaces, validators and distributed-ledger operators, and certain peer-to-peer liquidity activity.
The proposal recognizes the potential of digital identity, including verifiable credentials such as state-issued mobile IDs and privacy-preserving credentials, and proposes a flexible, risk-based approach to their use.
These principles directly align with what TDC has been advocating for: regulating financial activity without inadvertently regulating the underlying technology and allowing regulated companies to use better technology to achieve stronger compliance outcomes.
Building on the Progress
TDC’s latest response asks agencies to provide greater clarity around account relationships, redemption-only customers, embedded-finance arrangements and third-party reliance, while expanding regulatory certainty for digital identity, blockchain analytics, ecosystem monitoring, AI-enabled compliance, cybersecurity tools, and other innovative compliance technologies.
There is still work to do before the rules are finalized, but we are encouraged by the latest updates and improvements. TDC’s engagement is inserting industry expertise into workable federal policy. The latest proposal demonstrates the value of sustained, technically detailed advocacy — and provides an important foundation for the next phase of GENIUS Act implementation.
