Federal Reserve proposes customer identification requirement for certain payment stablecoin issuers

The Federal Reserve Board has issued a proposal requiring certain payment stablecoin issuers to maintain an effective customer identification programme. The consultation signals the regulator’s intention to extend anti-money laundering controls, historically applied to banks and money services businesses, to stablecoin issuers operating within federal oversight.

The proposal does not specify which issuers fall within scope or define the threshold for ‘payment stablecoin’, though the phrasing suggests a subset rather than universal application. The comment period opens the door for industry to shape eligibility criteria, the technical standard for identification, and the compliance burden relative to existing obligations under state or FinCEN frameworks.

For firms issuing or planning to issue payment stablecoins, the proposal introduces regulatory uncertainty around customer onboarding, particularly for issuers that have relied on downstream custodians or exchanges to discharge know-your-customer duties. The draft also sets a precedent for federal stablecoin supervision that may inform broader legislation currently under discussion in Congress.