NPRM: Permitted Payment Stablecoin Issuer Customer Identification Program (91 FR 37234) (Part 2 of 4)
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Research, not advice. Part of the Bitcoin research archive (October 2026). Claims labelled unverified, contested or fringe are reported, not endorsed; statuses of bills and rules are as of the date checked. Government, court and patent records are public domain; the research notes are CC BY 4.0.
regulatory economic analysis, FinCEN ensue from an ineffective AML/CFT
CIP; maintain risk-based procedures for and the Agencies’ assessment of impact regime.113
verifying the identity of each customer begins with an overview of broad FinCEN and the Agencies expect that
to the extent reasonable and practicable; economic considerations, identifying, the proposed rulemaking would
maintain certain records; and compare among other things, the need for the meaningfully alleviate certain
the customers’ identity with government policy intervention.105 Next, FinCEN underlying economic problems that
lists. The proposal would also require a and the Agencies (1) establish baseline could otherwise impair the effective
PPSI to include procedures for customer estimates of the number of covered administration of the BSA and
notice related to verifying identity, PPSIs and other entities, including potentially distort affected markets.
allows reliance on another financial insured depository institutions, that These include potential problems that
institution’s CIP under certain could be affected by the proposed rule, flow from the incidence of both positive
circumstances, and outlines the ability and (2) describe the current regulatory and negative externalities in connection
of FinCEN and the Agencies to issue requirements and background practices with customer identification activity
exemptions related to the CIP against which the proposed rule would and the potential for regulatory arbitrage
requirement. introduce changes.106 The analysis then in the absence of uniform minimum
In issuing this proposal, FinCEN and briefly reviews elements of the proposed standards for financial institutions’
the Agencies contemplate a number of rule that most directly inform how CIPs.114
benefits for PPSIs, regulators, other foreseeable economic impacts would The expected benefits of the proposed
compliance examiners, law enforcement flow from how PPSIs and their rule, as discussed below,115 are
and national security agencies, and the respective regulators would engage in therefore linked by the extent to which
general public. Such benefits include activities not expected to otherwise be the proposed requirements would
CIPs that effectively contribute to the undertaken in order to comply.107 Next, address these fundamental economic
detection and deterrence of money the RIA presents the anticipated benefits problems.
laundering and terrorist financing, and estimated costs to the respective
2. Institutional Baseline and Affected
support broader BSA policy goals, and affected parties that would be associated
Parties
help ensure that CIPs for PPSIs are with the proposed CIP obligations.108
Finally, the assessment concludes with In proposing this rule, FinCEN and
consistent with those required for other
a brief discussion of alternative policies the Agencies considered the
financial institution types with CIP
requirements, which should promote FinCEN and the Agencies considered
110 See 12 U.S.C. 5903(a)(5)(A)(v); see also
efficiencies and reduce opportunities for and could have proposed, including an
generally, supra section II.
regulatory arbitrage. evaluation of the relative economic 111 See E.O. 12866, Regulatory Planning and
This regulatory impact analysis (RIA) merits of each against the expected Review, 58 FR 51736, section 1(b)(1) (Oct. 4, 1993)
begins by describing the broad value of the rule as proposed.109 (‘‘Each agency shall identify the problem that it
intends to address (including, where applicable, the
economic analysis FinCEN and the 1. Broad Economic Considerations failures of private markets or public institutions
Agencies undertook to inform their that warrant new agency action) as well as assess
In performing its assessment of the significance of that problem.’’).
96 The UMRA requires an assessment of mandates impact, FinCEN and the Agencies took 112 See 12 U.S.C. 5903(a)(5)(A)(v).
with an annual expenditure of $100 million or into consideration certain fundamental 113 In a related context, with respect to AML/CFT
more, adjusted for inflation. 2 U.S.C. 1532(a). economic problems that the proposed programs, Congress instructed FinCEN to consider
FinCEN and the Agencies have not anticipated rule is expected to address as well as the the potential economic inefficiencies engendered by
material changes in expenditures for State, local, the presence of market externalities when
and Tribal governments, insofar as they would not general social and economic costs that promulgating implementing regulations. See 31
participate in the primary activities of monitoring U.S.C. 5318(h)(2)(B)(i) (stating financial institutions
or enforcing compliance of the newly proposed 99 See infra section VIII.A. are spending private compliance funds for a public
requirements in a way that differs from current 100 See infra section VIII.B. and private benefit, including protecting U.S.
involvement, thereby incurring novel incremental 101 See infra section VIII.C. financial system from illicit finance risks); see also
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costs. But because the proposed rule would affect 102 See infra section VIII.D. 31 U.S.C. 5318(h)(2)(B)(iii) (stating that AML/CFT
entities in the private sector that are covered 103 See infra section VIII.E. programs safeguard national security and generate
financial institutions, FinCEN and the Agencies 104 See infra section VIII.F.
significant public benefits by preventing illicit
have considered expenditures these private entities flows of funds and assisting law enforcement and
105 See infra section VIII.A.1.
may incur, pursuant to UMRA, as part of the national security agencies with information).
106 See infra section VIII.A.2.
regulatory impact in its assessment below. 114 See, e.g., FinCEN, Anti-Money Laundering and
97 See supra section I; see also supra section V. 107 See infra section VIII.A.3.
Countering the Financing of Terrorism Programs, 89
98 See 31 U.S.C. 5903(a)(5)(A), 5903(a)(5)(A)(v); 108 See infra section VIII.A.4. FR 55428, 55450 (July 3, 2024).
see also 31 U.S.C. 5318(l). 109 See infra section VIII.A.5. 115 See infra section VIII.A.4.i.
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37246 Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules
incremental impacts of the proposed internal controls to verify customer those independent exercises into
CIP requirements relative to the current identification; 119 (ii) file currency consideration, the proposed rule could
state of the affected markets and their transaction reports; 120 (iii) file be expected to apply to approximately
participants.116 This baseline analysis of Suspicious Activity Reports (SARs); 121 50 PPSIs in each of the first three years
the parties that would be affected by the and (iv) maintain certain records, of the GENIUS Act being effective. Table
proposed rule, their current CIP-like including those relating to certain 1 illustrates the anticipated distribution
obligations and activities, and the costs transmittals of funds.122 MSBs are of these potential PPSIs as organized by
and/or benefits associated with those required to register with FinCEN 123 and types as categorized in the GENIUS
activities satisfies analytical best are subject to examination for BSA Act’s definition of ‘‘permitted payment
practices by describing the alternative of compliance by the Internal Revenue stablecoin issuer’’ 129 and proposed
not pursuing the proposed, or any other, Service (IRS).124 definition § 1010.100(ttt). That proposed
novel regulatory action.117 In each case, While MSBs are not subject to as definition contains three subtypes of
the RIA has attempted to identify the many customer identification PPSIs, specifically those that are
incremental expected economic effects requirements as other types of financial subsidiaries of insured depository
of each component of the proposal as institutions under the BSA, the BSA institutions or credit unions that have
precisely as practicable against this does require them to maintain policies, been approved to issue payment
baseline. Nevertheless, in certain cases, procedures, and internal controls to stablecoins by a primary Federal
FinCEN and the Agencies can only verify customer identification 125 and to payment stablecoin regulator
make qualitative assessments. collect identification information for (collectively ‘‘subsidiaries of insured
As a first step in the process of transmittals of funds over $3,000— depository institutions’’); Federal
isolating these anticipated marginal including the name, address, and qualified payment stablecoin issuers
effects, FinCEN and the Agencies identification document of an (FQPSIs); and State qualified payment
assessed the regulatory and market individual requesting transmission 126— stablecoin issuers (SQPSIs).130 As
landscape facing the current stablecoin and for transactions in currency of more explained in proposed § 1010.100(vvv),
issuers, and potential future PPSIs, that than $10,000.127 a FQPSI is an entity approved by the
would be affected by the proposed rule, OCC under 12 U.S.C. 5903 to issue
ii. Baseline of Expected Affected Parties payment stablecoins and is either—(1) a
including an estimate of the expected
near-term number of potential PPSIs, FinCEN and the Agencies have nonbank entity, (2) an uninsured
their existing regulatory requirements, identified four distinct populations national bank, or (3) a Federal
and the burden they either would or expected to be directly affected, to branch.131
currently face in connection with the varying degree, by the proposed rule, FinCEN expects that of the 50
compliance activities the proposed rule namely: (1) PPSIs, (2) customers of anticipated PPSIs, approximately 60
would require. FinCEN and the PPSIs, (3) certain other financial percent should be subsidiaries of
Agencies also briefly discuss other institutions, and (4) other less directly insured depository institutions and 40
categories of persons and entities (i.e., affected parties, including regulators percent not.132 133 Because FinCEN has
regulators, compliance examiners, law (including examiners working for or not identified, with more certainty than
enforcement and national security under the authority of those regulators) not, currently operating stablecoin
agencies, and certain members of the and law enforcement and national issuers that it expects will become
general public) that are expected to be security agencies. To the extent that SQPSIs within the PPSI regulatory
economic impact on additional key, framework (as defined in proposed
directly affected by the proposed rule.
directly affected subpopulations of the § 1010.100(ttt)(3) and § 1010.100(xxx)),
i. Regulatory Baseline general public should be considered, the population used in this analysis
As discussed in section II, stablecoin FinCEN and the Agencies invite does not further distinguish its estimate
issuers are already subject to BSA comments, data, studies, or reports that for these types of potential future PPSIs
obligations as MSBs, specifically, would enhance its ability to identify from other non-IDI subsidiary expected
money transmitters. As MSBs, and quantify such effects. future PPSIs.134 Because these
stablecoin issuers are currently subject projections represent best-effort
a. PPSIs estimates based on limited information,
to a range of BSA obligations. MSBs are
required to, for instance, (i) establish FinCEN and the Agencies have
conducted independent research with a Issuance of Stablecoins by Entities Subject to the
and maintain written AML programs 118 Jurisdiction of the Office of the Comptroller of the
that include policies, procedures, and view to estimating the number of Currency, 91 FR 10202 (Mar. 2, 2026); FDIC,
potential PPSIs that would exist in the GENIUS Act Requirements and Standards for FDIC-
116 In this context, FinCEN and the Agencies near-term future.128 Taking each of Supervised Permitted Payment Stablecoin Issuers
employ the term ‘‘market’’ in its broadest economic and Insured Depository Institutions, 91 FR 18534
sense, referring to any set of exchanges, 119 31 CFR 1022.210(d)(1)(i)(A). (Apr. 10, 2026).
129 12 U.S.C. 5901(23).
transactions, or actions that involve counterparties 120 31 CFR 1022.310.
130 See PPSI AML/CFT NPRM, at section
with unique objectives. The baseline here set forth 121 31 CFR 1022.320.
also forms the counterfactual against which the 122 31 CFR 1022.400, 1010.410(e)–(f).
VI.C.1.ix, supra note 4; see also 12 U.S.C. 5901(23).
quantifiable effects of the rule are measured; 123 31 CFR 1022.380.
131 See PPSI AML/CFT NPRM, at section
therefore, substantive errors in or omissions of VI.C.1.ix, supra note 4; see also 12 U.S.C. 5901(23).
124 31 CFR 1010.810(b).
relevant data, facts, or other information may affect 132 See PPSI AML/CFT NPRM, at sections
125 31 CFR 1022.210(d)(1)(i)(A).
the conclusions formed regarding the general and VI.C.1.xi and xiii, supra note 4; see also 12 U.S.C.
economically significant impacts of the rule. 126 31 CFR 1010.410(e)(1).
5901(11), (31).
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FinCEN and the Agencies invite comment on the 127 31 CFR 1010.311, 110.312. 133 The OCC estimates that within the first year
accuracy of the baseline population estimates as 128 See, e.g., FDIC, Approval Requirements for of the GENIUS Act being effective, 12 currently
well as any supporting studies, data, or anecdotes. Issuance of Payment Stablecoins by Subsidiaries of non-OCC regulated institutions would have PPSI-
117 See E.O. 12866, supra note 86, at section 1(a) affiliated subsidiaries and 12 OCC-regulated
FDIC-Supervised Insured Depository Institutions, 90
(‘‘In deciding whether and how to regulate, agencies FR 59409 (Dec. 19, 2025); NCUA, Investments in depository institutions would have PPSI affiliated
should assess all costs and benefits of available and Licensing of Permitted Payment Stablecoins subsidiaries.
regulatory alternatives, including the alternative of Issuers, 91 FR 6531 (Feb. 12, 2026); OCC, 134 See PPSI AML/CFT NPRM, at section
not regulating.’’). Implementing the Guiding and Establishing VI.C.1.xiii, supra note 4; see also 12 U.S.C.
118 31 CFR 1022.210. National Innovation for U.S. Stablecoins Act for the 5901(31).
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Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules 37247
the public is strongly encouraged to the accuracy and precision of these
provide additional comments, data, and estimates.
other information that could enhance
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37248 Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules
b. Customers of PPSIs provider activities where those activities number of expected affected financial
FinCEN and the Agencies expect the are authorized by the appropriate institutions in either category, there are
general public to be affected by the primary Federal or the State payment two particular categories that could
proposed rule, with certain stablecoin regulator and consistent with reasonably be expected to be affected by
subpopulations affected more directly all other Federal and State laws. the proposed CIP requirements for
than others. In particular, FinCEN and However, some PPSIs are expected to PPSIs.
the Agencies considered customers of have substantially more or substantially The first category includes insured
PPSIs, as the term ‘‘customer’’ is less customers than this estimate. In depository institutions that have a PPSI
proposed to be defined in this total, FinCEN does not expect the total as a subsidiary. Because this RIA
rulemaking. Although estimated number of unique primary market PPSI projects that there may be up to 30 such
payment stablecoin users number in the customers to exceed 300,000. However, PPSIs in the next three years, the
hundreds of millions, a substantially FinCEN estimates that a substantial corresponding number of expected
smaller number (in the hundreds of portion of these customers may be affected insured depository institutions
thousands) are likely to interact with affiliates of a single counterparty or would also be up to 30. It is anticipated
PPSIs in the primary market. Many of associated with non-U.S. entities.136 that an insured depository institution
these customers are large financial FinCEN estimates that the number of would arrange for its subsidiary PPSI’s
institutions and most large stablecoin customers that are U.S. businesses is CIP to nest within the preexisting
issuers set significant financial likely no more than 10,000. As overall CIP structure of the parent
requirements for primary market described earlier, these businesses organization. As such, parent
participants that exclude retail-level belong to several categories, including organizations may be economically
participation. In terms of volume, most digital asset exchanges, specialized affected by the need to revise, expand,
primary market activity can be digital asset commodities traders, and or otherwise tailor existing CIPs.
attributed to these large entities. Most other types of investment- and FinCEN and the Agencies expect,
primary market activity, as measured in securities-related businesses. Besides however, that similarities between the
transaction volume, is attributable to digital asset exchanges, FinCEN expects existing CIP rule for banks and this
these large entities. However, some most of a PPSI’s other customers are proposal would minimize, though not
issuers have increasingly adopted likely to be financial institutions.137 eliminate, this cost.
wider-facing mint/redeem models that FinCEN also used publicly available The second category of financial
seek to include smaller investors and data on on-chain minting and institutions expected to be affected by
businesses. redemption activity to analyze annual the proposed CIP requirements includes
To estimate the number of expected rates of customer growth and turnover. those financial institutions already
primary market customers a future PPSI Many of the stablecoin issuers reviewed subject to their own CIP obligations on
might interact with, FinCEN examined retained the same group of large ‘‘core’’ which one or more PPSIs would be able
current on-chain minting and primary market customers year over to rely for the performance of aspect of
redemption activity as observable from year but exhibited significant turnover its CIP obligations, pursuant to
publicly available data. Almost all the among their smaller primary market proposed § 1033.220(a)(6), or which
stablecoin products meeting the customers. In addition, most stablecoin themselves could rely upon a PPSI for
GENIUS Act’s definitional criteria for issuers saw significant growth in their the performance of some aspect of their
future payment stablecoins that FinCEN primary market customer base during own CIP obligations, pursuant to the
reviewed had fewer than 1,000 primary 2025. For purposes of modeling
provision of the financial institution’s
market customers in a given year, which expected economic effects, FinCEN and
CIP regulation analogous to proposed
is consistent with prior expectations of the Agencies assume that this growth
§ 1033.220(a)(6).138 Table 2 presents the
high institutional barriers. However, a will continue, particularly among
total number of financial institutions
small number of the stablecoins stablecoin issuers that are able to secure
already subject to CIP obligations,
reviewed had significantly more PPSI registration. Of the stablecoin
which represents the maximum number
primary market contact (with over issuers FinCEN reviewed, the average
of potentially affected parties in this
250,000 customers) in a given year. In rate of new customer inflow, year over
category. FinCEN considers it unlikely
the sample of issuers FinCEN reviewed, year, was approximately 65 percent of
that all, or even many, of these 14,575
the average number of an issuer’s the number of existing, previous
customers. Therefore, FinCEN and the financial institutions would either be
primary market customers was relied upon by PPSIs for some aspect of
approximately 17,000, but this value Agencies apply this rate, where
relevant, when estimating the costs in the PPSI’s CIP compliance or rely upon
appeared to be driven by extreme PPSIs for some aspect of the
outliers. The truncated average was the remaining analysis.
institution’s CIP.139 FinCEN and the
approximately 1,000, and the median c. Other Financial Institutions Agencies acknowledge, however, that
value was 100.135 this expectation is somewhat
Based on this analysis, FinCEN Certain other financial institutions
estimate that the ‘‘average’’ PPSI would may be affected by the proposed rule.
138 See, e.g., 31 CFR 1020.220(a)(6) (analogous CIP
have approximately 1,000 primary Although FinCEN and the Agencies
provision applicable to banks).
market customers that it interacts with cannot, at this time, provide the specific 139 Proposed § 1033.220(a)(6)(iii) would require
directly, including issuing and that ‘‘[t]he other financial institution [. . .] certify
136 In cases where these entities are not U.S.
annually to the permitted payment stablecoin issuer
redeeming payment stablecoins and persons, the incremental economic burdens of the that it has implemented its AML/CFT program, and
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engaging in digital asset service proposed rule, while considered as part of the that it will perform (or its agent will perform)
broader economic analysis, are not included in the specified requirements of the permitted payment
135 To address the impact of extreme outliers, the IRFA because RFA considerations apply to U.S. stablecoin issuer’s CIP.’’ A bank that is not
truncated mean was estimated by removing six small entities only. examined by a Federal functional regulator (FFR)
137 Such firms would be classified under North may rely on another financial institution’s CIP
percent of the sample from the left and right tails
of the distribution (the single smallest and largest American Industry Classification System (NAICS) where that institution is overseen by an FFR.
values). The largest value was more than three industry code 523 (‘‘Securities, Commodity However, another financial institution cannot rely
standard deviations away from nearest value, Contracts, and Other Financial Investments and on the CIP of a bank that is not examined by an
making it a significant outlier. Related Activities’’). FFR. See 31 CFR 1020.220(a)(6)(ii).
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speculative and are interested in receiving comments on the anticipated
receiving comments on the anticipated likelihood of this outcome.
likelihood of this outcome.
TABLE 2—ESTIMATES OF FINANCIAL INSTITUTION TYPES WITH EXISTING CIP REQUIREMENTS
Number of
Financial institution type a financial
institutions
Banks with a Federal functional regulator (FFR) b .............................................................................................................................. c 8,623
Banks without an FFR d ....................................................................................................................................................................... e 365
Broker-Dealers f ................................................................................................................................................................................... g 3,278
Mutual Funds h ..................................................................................................................................................................................... i 1,355
Futures Commission Merchants (FCMs) and Introducing Brokers in Commodities (IBCs) j .............................................................. k 954
Total .............................................................................................................................................................................................. 14,575
a See 31 U.S.C. 5312(a)(2); 31 CFR 1010.100(t) (definition of financial institution).
b See 31 CFR 1010.100(t)(1); 31 CFR 1010.100(d); 31 CFR 1020.210(a); 31 CFR 1020.220 (CIP requirements for banks).
c This includes 4,336 FDIC-insured depository institutions (i.e., Federally regulated banks) according to the FDIC’s Quarterly Bank Profile for
Q4 2025, p. 2 (https://www.fdic.gov/quarterly-banking-profile/past-quarterly-banking-profiles). It also includes 4,287 NCUA-chartered credit unions
(i.e., Federally regulated credit unions) as of December 31, 2025, according to the NCUA’s Quarterly Credit Union Data Summary: 2025 Q4, p. i
(https://ncua.gov/analysis/credit-union-corporate-call-report-data/quarterly-data-summary-reports).
d See 31 CFR 1020.210(b); 31 CFR 1020.220 (CIP requirements for banks).
e The Board of Governors of the Federal Reserve System Master Account and Services Database (https://www.federalreserve.gov/
paymentsystems/master-account-and-services-database-existing-access.htm) contains data as of November 30, 2025 on financial institutions that
use Federal Reserve Bank financial services, including those with no additional Federal regulator. FinCEN used this data to identify 365 banks
and credit unions with no additional Federal regulator using Federal Reserve Bank financial services.
f See 31 U.S.C. 5312(a)(2)(G); 31 CFR 1010.100(t)(2); 31 CFR 1023.220 (CIP requirements for broker-dealers).
g This estimate is based on U.S. Securities and Exchange Commission (SEC) data on active broker-dealers available at ‘‘Company Information
About Active Broker-Dealers’’ (https://www.sec.gov/foia-services/frequently-requested-documents/company-information-about-active-broker-deal-
ers), which listed 3,278 active broker-dealers registered with the SEC as of December 31, 2025.
h See 31 U.S.C. 5312(a)(2)(I); 31 CFR 1010.100(t)(10); 31 CFR 1024.220 (CIP requirements for mutual funds).
i This estimate is based on the number of N–1A registrants in SEC’s Annual Registered Investment Company Update: Form N–CEN Data, Pe-
riod Ending December 2024, April 2025, table 1.3, p. 4 (https://www.sec.gov/files/annual-registered-investment-company-update-20250404.pdf).
j See 31 U.S.C. 5312(a)(2)(H); 31 CFR 1010.100(t)(8–9); 31 CFR 1026.220 (CIP requirements for FCMs and IBCs).
k According to Commodity Futures Trading Commission data on FCMs available at ‘‘Financial Data for FCMs’’ (https://www.cftc.gov/
MarketReports/financialfcmdata/index.htm), there were 66 registered FCMs as of December 31, 2025. The number of IBCs as of December 31,
2025 (888) was obtained from the National Futures Association ‘‘NFA Membership and Registration’’ website (https://www.nfa.futures.org/reg-
istration-membership/membership-and-directories.html). Because deduplication of entities registered as both FCMs and IBCs was not feasible,
this estimate may double-count some entities registered in both categories. FinCEN, however, believes this subpopulation may be small.
d. Other Affected Parties in that NPRM, this proposed rule is reporting requirements that would
Regulators and Compliance expected to directly affect FinCEN as provide data directly to law
Examiners: Examiners required to verify well as the primary Federal payment enforcement or regulators, they support
whether CIP obligations are being stablecoin regulators, i.e., the Agencies, overall AML/CFT obligations and are
followed by PPSIs would be directly and their compliance examiners, who complementary to the direct benefits of
affected by the proposed rule.140 In a number approximately 7,500 from the those programs for law enforcement. For
Agencies, plus several hundred instance, effective CIP practices include
separate rulemaking, FinCEN is
additional examiners from the IRS.143 retaining standardized records that may
proposing changes to its existing Law Enforcement and National support future law enforcement and
regulations to effectuate the GENIUS Security Agencies: Law enforcement and
Act’s direction to apply BSA obligations national security needs and may
national security agencies can directly improve the efficacy of certain types of
to PPSIs.141 FinCEN’s PPSI AML/CFT access and use reports provided to
NPRM includes a proposal to (1) amend BSA reporting, such as SARs, by
FinCEN in compliance with the AML/ providing PPSIs with additional data on
31 CFR 1010.810(b) to delegate CFT requirements after entering a
examination authority to the primary existing or potential customers.
memorandum of understanding with
Federal payment stablecoin regulators FinCEN. As of fiscal year 2024, 432 iii. Current Market Practices
(the Agencies) and (2) assert that its federal, state, and local law
existing regulations delegates In considering the impact of the
enforcement; regulatory; and national proposed rule, FinCEN and the
examination authority to the IRS for the security agencies had access to BSA
SQPSIs.142 As a function of the proposal Agencies considered certain relevant
reports and BSA Search, and the BSA features and CIP practices of current
Portal had over 12,000 authorized stablecoin issuers that could meet the
140 Certain state regulators may be affected in a
way that is comparable to the effects on Federal
personnel with access.144 While CIP proposed definitional criteria of PPSI.
regulators. However, given that the GENIUS Act obligations do not include express In defining current practices, it is first
sets out a federal regulatory framework with certain
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tasks for Federal regulators, it is difficult at this 143 These figures represent an approximate
important to distinguish stablecoins in
time to do more than speculate about what actions number of Federal examiners. general from the narrower concept of a
states may take, and therefore the Agencies did not 144 See FinCEN, Financial Crimes Enforcement payment stablecoin as defined by the
attempt to estimate the effect of this rule on state Network (FinCEN) Year in Review for Fiscal Year GENIUS Act. As discussed earlier,
regulatory agencies. However, the Agencies are 2024, p. 5, available at https://www.fincen.gov/
interested in receiving comments offering
stablecoins that carry indicators they
system/files/2025-08/FinCEN-Infographic-Public-
assessments on this subject. 2025-508.pdf. Note that not all users are from
could be payment stablecoins are only
141 See PPSI AML/CFT NPRM, supra note 4.
external agencies. FinCEN employees are also a subset of the overall market of
142 Id. among the users with access to the BSA Portal. stablecoins, although they represent
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37250 Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules
over 80 percent of the total market Many of the stablecoin issuers view towards the specific features or
value.145 Payment stablecoins have evaluated by FinCEN tended to retain elements that are expected to generate,
several features that make CIP the same group of large ‘‘core’’ primary either directly or indirectly, an
compliance more practical for their market customers year over year, but economic benefit or cost or lead to
issuers. Most importantly, PPSIs are exhibited significant turnover among changes in a market participant’s
likely to have a centralized issuance smaller primary market customer incentives in a way that may generate
structure in which the issuer is obliged institutions focused on market arbitrage economic benefits or costs.147 For
to redeem upon demand the advertised or other short-term trading completeness, this section presents a
fixed value for every coin issued. As opportunities. Turnover rates were brief review of all of the components of
opposed to decentralized issuance particularly high among issuers whose the proposed rule and sorts those not
structures, where users can business models facilitated larger anticipated to have a separable
anonymously mint, trade, and redeem numbers of primary market customers. incremental effect from those
their own coins on a decentralized Stablecoin issuers such as this may see
foreseeably expected to impose direct
blockchain largely free of any third- several thousand new primary market
economic effects. The latter are then
party interface, centralized issuance participants in a given year, indicating
structures allow a collection point for that such issuers are likely to have further discussed in the following
customer information and transaction automated know your customer subsection (VIII.A.4). For components of
records for primary-market transactions. functions to facilitate large numbers of the proposed rule that FinCEN and the
In order to collect, screen, and store new customers. Smaller or more Agencies’ analysis has not assigned a
customer information in the course of centralized issuers generally quantified burden (in hours or dollars),
business, stablecoin issuers and other experienced far fewer numbers of new the reason for doing so is briefly
financial market participants often customers (although retention or growth explained in the description of expected
employ software technologies especially may be similar from a percentage costs.148
suited for this purpose. These third- standpoint), indicating that processes To balance the completeness of the
party services provide customer identity may be more manual. Overall, most RIA with the desire for expositional
information verification and screening issuers saw significant growth in their clarity and ease of tractability between
to collect and verify personal primary market customer base during the proposed regulatory text and
information such as name or address, 2025, possibly a result of increased sections V (Section-by-Section Analysis)
and to identify whether someone adoption rates and greater regulatory and VIII (Regulatory Impact Analysis),
wishing to open an account is on a list clarity following the passage of the
FinCEN and the Agencies have included
of known or suspected terrorists or GENIUS Act.
Table 3, to provide a mapping of the
terrorist organizations, among other 3. Description of Proposed various components of the proposed
functions. These activities may be Requirements rulemaking as presented in section V to
performed in the ordinary course of
their analogous categorization in the
business but are also expected to occur For purposes of the RIA, FinCEN and
because stablecoin issuers have AML/ the Agencies considered the various RIA.
CFT program obligations as MSBs.146 components of the proposed rule with a
TABLE 3—OVERVIEW/MAPPING OF THE PROPOSED RULE
Discussed in RIA Proposed regulatory text
Elements of the Proposed Rule Section V analysis subsection(s) location
Define ‘‘account’’ as a formal relationship between a cus- V.A.1 ..................... VIII.A.3.i ................................ 1033.100(a)(1).
tomer and a PPSI established to provide or engage in
services, dealings, or other financial transactions, includ-
ing five non-exclusive examples.
Define ‘‘account’’ to exclude: (1) a product or service where V.A.1 ..................... VIII.A.3.i ................................ 1033.100(a)(2).
a formal relationship is not established with a person; (2)
an account the PPSI acquires through an acquisition,
merger, purchase of assets, or assumption of liabilities
from a financial institution; (3) an account opened to par-
ticipate in an Employment Retirement Income Security
Act of 1974 employee benefit plan; or (4) ownership or
control of a PPSI’s payment stablecoins alone, without
other indicators of a formal relationship.
Define ‘‘customer,’’ for purposes of PPSI CIP requirements, V.A.2 ..................... VIII.A.3.i ................................ 1033.100(b)(1).
to include (1) a person that opens a new account and (2)
any individual who opens a new account for either: (a) an
individual who lacks legal capacity or (b) an entity that is
not a legal person.
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145 Among the approximately 352 stablecoin about 63 products, or less than 18 percent of all 146 See 31 CFR 1022.210; PPSI AML/CFT NPRM,
products evaluated by FinCEN, those products with products examined. However, the market value of supra note 4.
indicia of being a potential PPSI or foreign payment these products represented approximately 80 147 See infra section VIII.A.4.
stablecoin issuer payment stablecoin represented percent of the market value of the sample. 148 See infra section VIII.A.4.ii.
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Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules 37251
TABLE 3—OVERVIEW/MAPPING OF THE PROPOSED RULE—Continued
Discussed in RIA Proposed regulatory text
Elements of the Proposed Rule Section V analysis subsection(s) location
Define ‘‘customer,’’ for purposes of PPSI CIP requirements, V.A.2 ..................... VIII.A.3.i ................................ 1033.100(b)(2).
to exclude: (1) a financial institution with an FFR or a
bank regulated by a State bank regulator, (2) a defined
exempt person as described in 31 CFR 1020.315(b)(2)–
(4), (3) a known PPSI customer with an existing account,
and (4) a person acquiring/redeeming a payment
stablecoin from a means other than directly to/from the
PPSI.
Define ‘‘digital asset service provider,’’ for purposes of PPSI V.A.3 ..................... VIII.A.3.i ................................ 1033.100(c)(1).
CIP requirements, to include certain defined persons en-
gaged in select businesses.
Incorporate ‘‘person’’ as defined by the GENIUS Act within V.A.3 ..................... VIII.A.3.i ................................ 1033.100(c)(1)(i).
the PPSI–CIP framework to adopt the meaning set forth
in 12 U.S.C. 5901(24) when defining a ‘‘digital asset
service provider.’’.
Incorporate ‘‘monetary value’’ as defined by the GENIUS V.A.3 ..................... VIII.A.3.i ................................ 1033.100(c)(1)(i)(A).
Act to clarify its meaning within the definition of ‘‘digital
asset service provider’’ as set forth in 12 U.S.C. 5901(7).
Define ‘‘digital asset service provider,’’ for purpose of PPSI V.A.3 ..................... VIII.A.3.i ................................ 1033.100(c)(2).
CIP requirements, to exclude: (1) distributed ledger proto-
cols; (2) developing, operating, or engaging in the busi-
ness of developing distributed ledger protocols or self-
custodial software interfaces; (3) immutable and self-cus-
todial software interfaces, (4) developing, operating, or
engaging in the business of validating transactions or op-
erating a distributed ledger, or (5) participating in a liquid-
ity pool or similar mechanism.
Introduce a definition of ‘‘distributed ledger protocol’’ to clar- V.A.3 ..................... VIII.A.3.i ................................ 1033.100(c)(3).
ify its meaning within the definition of ‘‘digital asset serv-
ice provider’’ as set forth in 12 U.S.C. 5901(9).
Require a PPSI to establish and maintain a written CIP ap- V.B.1 ..................... VIII.A.3.ii, VIII.A.4.i, 1033.220(a)(1).
propriate for its size and business that is part of the VIII.A.4.ii.a, VIII.E..
PPSI’s AML/CFT Program.
Require a PPSI’s CIP to include risk-based identity V.B.2 ..................... VIII.A.3.ii, VIII.A.4.i, 1033.220(a)(2).
verification procedures, including procedures for opening VIII.A.4.ii.a, VIII.E.
an account that specify the identifying information that
would be obtained with respect to each customer.
Require that a PPSI’s CIP contain procedures for opening V.B.2.i ................... VIII.A.3.ii, VIII.A.4.i, 1033.220(a)(2)(i).
an account that specify the identifying information that VIII.A.4.ii.a, VIII.E.
would be obtained prior to account opening with respect
to each customer, including, at minimum: (1) name, (2)
date of birth/formation, (3) address, and (4) identification
number, subject to certain exceptions.
Require a PPSI’s CIP to contain procedures for verifying V.B.2.ii ................... VIII.A.3.ii, VIII.A.4.i, 1033.220(a)(2)(ii).
the identity of each customer within a reasonable period VIII.A.4.ii.a, VII.E.
of time before or after the customer’s account is opened,
using information obtained in accordance with its cus-
tomer identification procedures that describe when the
PPSI would use documents, non-documentary methods,
or a combination of both methods.
Require that if the PPSI is relying on documents to verify a V.B.2.ii.a ................ VIII.A.3.ii, VIII.A.4.i, 1033.220(a)(2)(ii)(A).
customer’s identity, the CIP must contain procedures that VIII.A.4.ii.a, VIII.E.
set forth the documents the PPSI would use.
Provide non-exclusive lists of examples of documents a V.B.2.ii.a ................ VIII.A.3.ii ............................... 1033.220(a)(2)(ii)(A)(1) &
PPSI may use to verify the identity of customers that are 220(a)(2)(ii)(A)(2).
(1) natural persons/individuals or (2) other persons.
Require that if a PPSI would employ non-documentary V.B.2.ii.b ................ VIII.A.3.ii, VIII.A.4.i, 1033.220(a)(2)(ii)(B).
methods to verify the identity of a customer, its CIP must VIII.A.4.ii.a, VIII.E.
contain procedures that set forth the non-documentary
methods the PPSI would use.
Provide a non-exclusive list of examples of non-documen- V.B.2.ii.b ................ VIII.A.3.ii ............................... 1033.220(a)(2)(ii)(B)(1).
tary methods a PPSI may use to verify customer identity.
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37252 Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules
TABLE 3—OVERVIEW/MAPPING OF THE PROPOSED RULE—Continued
Discussed in RIA Proposed regulatory text
Elements of the Proposed Rule Section V analysis subsection(s) location
Require that a PPSI’s non-documentary procedures must V.B.2.ii.b ................ VIII.A.3.ii, VIII.A.4.i, 1033.220(a)(2)(ii)(B)(2).
address situations where: (1) the customer (a) is an indi- VIII.A.4.ii.a, VIII.E.
vidual unable to present an unexpired government-issued
identification document bearing a photograph or similar
safeguard or (b) opens the account without meeting in
person; or (2) the PPSI (a) is unfamiliar with the docu-
ments presented, (b) opens an account without obtaining
documents, or (c) is otherwise presented with cir-
cumstances that increase the risk that it will be unable to
verify the true identity of a customer through documents.
Require that the PPSI’s CIP address situations where, V.B.2.ii.c ................ VIII.A.3.ii, VIII.A.4.i, 1033.220(a)(2)(ii)(C).
based on the PPSI’s risk assessment of the new account VIII.A.4.ii.a, VIII.E.
of a customer that is not an individual, the PPSI deter-
mines it cannot verify the customer’s true identity using
either the its CIP’s established documentary and non-
documentary verification methods, the PPSI will obtain in-
formation about individuals with authority or control over
such account in order to verify the customer’s identity.
Require a PPSI CIP include procedures for when it cannot V.B.2.iii .................. VIII.A.3.ii, VIII.A.4.i, 1033.220(a)(2)(iii).
form a reasonable belief that it knows the true identity of VIII.A.4.ii.a, VIII.E.
a customer that describe: (1) when the PPSI should not
open an account, (2) the terms under which a customer
may use an account while the PPSI attempts to verify the
customer’s identity, (3) when the PPSI should close an
account after attempts to verify a customer’s identity fail,
and (4) when the PPSI should file a SAR in accordance
with applicable law and regulation.
Require the PPSI’s CIP include procedures for making and V.B.3 ..................... VIII.A.3.ii, VIII.A.4.i, 1033.220(a)(3)(i).
maintaining a record of all information obtained under VIII.A.4.ii.a, VIII.E.
procedures implementing its program, including at min-
imum: (1) all identifying information about a customer ob-
tained prior to account opening, (2) a description of any
document that was relied on to verify a customer’s iden-
tity, (3) a description of the methods and results of any
measures undertaken to verify the identity of a customer
(a) via the PPSI CIP’s non-documentary methods or (b)
by obtaining information about individuals with authority
or control over the account of a customer that is not an
individual, and (4) a description of the resolution of each
substantive discrepancy discovered when verifying the
identifying information obtained.
Require the PPSI to retain the records made using the CIP- V.B.3 ..................... VIII.A.3.ii, VIII.A.4.i, 1033.220(a)(3)(ii).
specified customer identification information obtained be- VIII.A.4.ii.a, VIII.E.
fore the opening of an account for five years after the
date the account is closed.
Require the PPSI to retain the records made using CIP- V.B.3 ..................... VIII.A.3.ii, VIII.A.4.i, 1033.220(a)(3)(ii).
specified methods to verify customer identity via: (1) doc- VIII.A.4.ii.a, VIII.E.
umentary and non-documentary methods; (2) obtaining
information about individuals with authority or control over
and account, as applicable; (3) resolving substantive dis-
crepancies discovered when verifying customer identifica-
tion information for five years after the record is made.
Require the PPSI’s CIP include reasonable procedures to: V.B.4 ..................... VIII.A.3.ii, VIII.A.4.i, 1033.220(a)(4).
(1) determine within a reasonable period of time after the VIII.A.4.ii.a, VIII.E.
account is opened, or earlier if required by another Fed-
eral law or regulation or Federal directive issued in con-
nection with the applicable list, whether a customer ap-
pears on any list of known or suspected terrorists or ter-
rorist organizations issued by any Federal Government
agency and designated as such by Treasury in consulta-
tion with the primary Federal payment stablecoin regu-
lotter on DSK8BHNXB4PROD with PROPOSALS2
lators; and (2) follow all Federal directives issued in con-
nection with such lists.
Require the PPSI’s CIP include procedures for providing V.B.5 ..................... VIII.A.3.ii, VIII.A.4.i, 1033.220(a)(5)(i).
customers with adequate notice that the PPSI is request- VIII.A.4.ii.a, VIII.E.
ing information to verify their identities.
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Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules 37253
TABLE 3—OVERVIEW/MAPPING OF THE PROPOSED RULE—Continued
Discussed in RIA Proposed regulatory text
Elements of the Proposed Rule Section V analysis subsection(s) location
Provide that customer notice would be considered ade- V.B.5 ..................... VIII.A.3.ii ............................... 1033.220(a)(5)(ii).
quate if the PPSI generally describes the CIP rule’s iden-
tification requirements and is provided in a manner rea-
sonably designed to ensure that a prospective customer
is able to view the notice, or is otherwise given notice,
before opening an account, such as by: (1) the PPSI
posting a notice on its website, (2) including the notice in
its account applications, or (3) any other form of oral or
written notice, depending upon the manner in which the
account is opened.
Provide sample language a PPSI may use to provide notice V.B.5 ..................... VIII.A.3.ii ............................... 1033.220(a)(5)(iii).
to its customer, as appropriate.
Allow for a PPSI’s CIP to include procedures specifying V.B.6 ..................... VIII.A.3.ii, VIII.A.4.i, 1033.220(a)(6).
when the PPSI will rely on the performance by another fi- VIII.A.4.ii.a, VIII.E.
nancial institution (including an affiliate) of any proce-
dures of the PPSI’s CIP, with respect to any customer of
the PPSI that is opening, or has opened, an account or
has established an account or similar business relation-
ship with the other financial institution to provide or en-
gage in services, dealings, or other financial transactions,
provided that: (1) the reliance is reasonable under the cir-
cumstances; (2) the other financial institution: (a) is sub-
ject to a rule implementing 31 U.S.C. 5318(h) or 12
U.S.C. 5903(a)(5)(A) and is regulated by an FFR; and (b)
enters into a contract with the PPSI requiring it to certify
annually to the PPSI that it has implemented its AML/
CFT program, and that it will perform (or its agent will
perform) specified requirements of the PPSI’s CIP.
Permit that, having considered whether the exemption is V.C ........................ VIII.A.3.i, VIII.A.4.ii.a, 1033.220(b).
consistent with the purposes of the BSA and with safety VIII.A.4.ii.c.
and soundness, in the public interest, and any other nec-
essary and appropriate factors, the appropriate FFR, with
the concurrence of the Secretary, may, by order or regu-
lation, exempt any PPSI or any type of account from the
requirements of this section, and the Secretary, with the
concurrence of the FFR, may exempt any PPSI or any
type of account from the requirements of this section.
Clarify that nothing in the rule relieves a PPSI of its obliga- V.D ........................ VIII.A.3.i ................................ 1033.220(c).
tion to comply with any other provision of 31 CFR chap-
ter X, including provisions concerning information that
must be obtained, verified, or maintained in connection
with any account or transaction, or its obligations with re-
spect to complying with the terms of any lawful order as
set forth in chapter X.
i. New Definitions ii. New Requirements The proposed rule would require that
a PPSI’s CIP include risk-based
As discussed in greater detail in As discussed in section V above, procedures for verifying the identity of
section V.A, FinCEN and the Agencies FinCEN and the Agencies are jointly each customer to the extent reasonable
propose adding three new terms proposing a rule to implement the and practicable. The procedures must
‘‘account,’’ ‘‘customer,’’ and ‘‘digital GENIUS Act’s directive that PPSIs enable the PPSI to form a reasonable
asset service provider’’ to the proposed maintain an effective CIP. belief that it knows the identity of each
new PPSI part of its regulations, 31 CFR
customer. The procedures must be
1033.100.149 The definitions are rule generally only applies to CIP requirements set
proposed for purposes of this CIP and based on the PPSI’s assessment of the
out in this proposed rule. Compare 31 CFR
would only apply to the CIP obligation relevant risks, including those presented
1010.230(c) (referencing in beneficial ownership
unless otherwise expressly noted.150 requirement the CIP definitions of ‘‘account’’) with by the various types of accounts
1010.605(c)(2) (defining ‘‘account’’ for purposes of maintained by the PPSI, the various
149 This proposal’s definitions are in addition to special due diligence obligations without reference methods of opening accounts provided
other terms defined in the GENIUS Act and to the CIP definitions of ‘‘account’’). As discussed by the PPSI, the various types of
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in the PPSI AML/CFT NPRM, the GENIUS Act
proposed to be codified by FinCEN as part of the identifying information available, and
PPSI AML/CFT NPRM, most notably, ‘‘digital directs that PPSIs have the technological capability
to comply and comply with the terms of lawful the PPSI’s size, location, and customer
asset,’’ ‘‘payment stablecoin,’’ and ‘‘permitted
payment stablecoin issuer.’’ See PPSI AML/CFT orders. See 12 U.S.C. 5903(a)(6)(B). Lawful order is base.
NPRM, supra note 4. defined, in part, by using the word ‘‘account.’’ See The proposed rule would require a
150 As noted in the PPSI AML/CFT NPRM, supra 12 U.S.C. 5901(16)(B). FinCEN is not intending,
note 4, for example, the term ‘‘account’’ is used in however, to apply the proposed CIP definition of PPSI to obtain the following information
various FinCEN regulations and in the GENIUS Act, account to the word ‘‘account’’ with respect to this prior to opening an account: (1) name;
but the definition of account in this proposed CIP obligation. (2) date of birth, for an individual; or
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37254 Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules
date of formation, for a person that is circumstances in which the PPSI cannot by another Federal law or regulation or
not an individual; (3) address (a form a reasonable belief that it knows Federal directive issued in connection
residential and mailing address for the true identity of a customer. These with the applicable list. The procedures
individuals, or principal place of procedures should describe: (1) when must also require the PPSI to follow all
business, local office, or other physical the PPSI should not open an account; Federal directives issued in connection
address and mailing address for a (2) the terms under which a customer with such lists.
person other than an individual); and may use an account while the PPSI Lastly, the proposed rule states that
(4) an identification number. attempts to verify the customer’s the CIP would be required to include
The proposed rule would require that identity; (3) when the PPSI should close procedures for providing customers
the CIP contain procedures for verifying an account after attempts to verify a with adequate notice that the PPSI is
the identity of each new customer, using customer’s identity fail; and (4) when requesting information to verify their
information obtained from the customer, the PPSI should file a SAR in identities. The proposed rule considers
within a reasonable period of time after accordance with applicable law and notice adequate if the PPSI generally
the customer’s account is opened. The regulation. describes the identification
procedures must describe when the The proposed rule states that the CIP requirements of this section and
PPSI would use documents, non- must include procedures for making and provides such notice in a manner
documentary methods, or a combination maintaining a record of all information reasonably designed to ensure that a
of both methods. obtained under procedures prospective customer is able to view the
The proposed rule states that if the implementing the CIP. This is consistent notice, or is otherwise given notice,
PPSI is relying on documents, then the with the requirement of 31 U.S.C. before opening an account. For example,
CIP must contain procedures that set 5318(l)(2)(B) that CIPs include depending upon the manner in which
forth the documents that the PPSI procedures for maintaining records of the account is opened, a PPSI may post
would use. For an individual, the PPSI the information used to verify a person’s a notice on its website, include the
could use an unexpired government- identity, including name, address, and notice in its account applications, or use
issued identification evidencing other identifying information. At a any other form of oral or written notice.
nationality or residence that contains a minimum, proposed § 1033.220(a)(3)(i) The proposed rule provides a sample
photograph or similar safeguard, such as requires that the record must include: notice.
a driver’s license or passport. For a (1) all identifying information about a
person other than an individual, such as 4. Anticipated Economic Effects
customer obtained under the CIP; (2) a
a corporation, partnership, or trust, the description of any document relied on This section provides FinCEN’s and
document must show the existence of to verify the identity of the customer the Agencies analysis of the expected
the entity, such as certified articles of under the CIP, noting the type of costs and benefits of the proposed rule
incorporation, a government-issued document, any identification number as attributed to the elements of the
business license, a partnership contained in the document, the place of regulation with foreseeable incremental
agreement, or a trust instrument. issuance, and if any, the date of effects. While not all costs and benefits
For a PPSI relying on non- issuance and expiration date; (3) a are readily quantifiable, in this analysis
documentary methods, the CIP must description of the methods and results FinCEN and the Agencies have sought
contain procedures that set forth the of any measures undertaken to verify to include an evaluation of certain
non-documentary methods the PPSI the identity of a customer; and (4) a foreseeable non-quantified economic
would use. These methods may include, description of the resolution of each benefits in addition to quantified costs
but are not limited to, contacting a substantive discrepancy discovered to more comprehensively assess the
customer; independently verifying the when verifying the identifying potential net benefit of the proposed
customer’s identity through the information obtained. rule and select alternatives.
comparison of information provided Additionally, the proposed rule states i. Expected Benefits
with respect to the customer with that a PPSI must retain the identifying
information obtained from a consumer information about a customer obtained The proposed rule aims to clarify and
reporting agency, public database, or under § 1033.2210(a)(3)(i)(A) of the standardize CIP requirements across all
other source; checking references with proposed rule for five years after the issuers of payment stablecoin that apply
other financial institutions; or obtaining date the account is closed, and the and are granted registration as PPSIs.
a financial statement. information regarding the verification of This standardized obligation across all
FinCEN and the Agencies believe that a customer’s identity records collected types of PPSIs would also harmonize
while the majority of customers may be under paragraphs (a)(3)(i)(B), (C), and the CIP obligations for payment
verified through documentary and non- (D) of this section for five years after the stablecoin issuers with those applicable
documentary methods, there may be record is made. to other types of covered financial
instances where this is not possible. The Consistent with 31 U.S.C. institutions, including banks. By
risk that the PPSI would not know the 5318(l)(2)(C), the proposed rule outlines standardizing CIP requirements for
customer’s true identity may be that the CIP would be required to PPSIs, the potential for PPSIs to exploit
heightened for certain types of accounts, include reasonable procedures for opportunities to engage in regulatory
such as an account opened in the name determining whether a customer arbitrage may be reduced. As discussed
of a corporation, partnership, or trust appears on any list of known or in section VIII.A.1, the expected
that is created or conducts substantial suspected terrorists or terrorist economic benefits of the proposed
lotter on DSK8BHNXB4PROD with PROPOSALS2
business in a jurisdiction that has been organizations issued by any Federal rulemaking hinge on its ability to reduce
designated by the United States as a government agency and designated as the potential exploitation of this
primary money laundering concern or such by Treasury in consultation with arbitrage as well as reducing the
has been designated as non-cooperative the Federal functional regulators. The inefficiencies that the positive
by an international body. procedures must require the PPSI to externalities of effective customer
The proposed rule states that the make such a determination within a identification practices and the negative
PPSI’s CIP would be required to include reasonable period of time after the externalities generated by insufficient
procedures for responding to account is opened, or earlier if required customer identification and
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Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules 37255
recordkeeping engender. A more even PPSIs systematize, and in some cases horizon are presented in Table 4.152
regulatory playing field might also automate, practices that facilitate the This includes expected costs to a static
remove the risk of potential inefficient detection of attempted financial crimes population of 50 PPSIs of approximately
overinvestment or socially costly and ensure that PPSIs have effective $284,000 in the first year, and an
underinvestment in the level of practices for identifying and verifying average of approximately $239,000 in
customer identification that could the identities of their customers and each year thereafter; 153 expected costs
otherwise be attributable to regulatory prospective customers. Insulating this to an anticipated PPSI customer base
uncertainty. Moreover, such financial market from abuse by bad that increases by 65 percent year over
standardization avoids the creation of actors of potentially significant social year of approximately $1.0 million
regulatory gaps that criminals can and monetary value is essential to its annually in the first year, and
exploit. growth and longevity and protects the approximately the same amount each
While these anticipated benefits are integrity of the broader U.S. financial year thereafter; 154 and expected costs to
more difficult to quantify than the costs, system. the government of approximately
the proposed rule is nonetheless $982,000 in the period leading up to the
ii. Expected Costs
expected to generate value insofar as first effective year of the final rule,
risk-based, effective CIPs can contribute This section assesses the foreseeable approximately $1.3 million in the first
to the detection and deterrence of costs to the respective parties expected effective year, and approximately
money laundering and terrorist to be incrementally economically $913,000 per year thereafter. In total, the
financing and support broader BSA impacted by the proposed rule.151 This quantified economic costs of the
policy goals. A PPSI’s efforts to obtain section is organized as follows. First, it proposed rule would amount to an
and verify the identity of account estimates select cost profiles likely to be average burden of approximately $2.3
holders or respond to circumstances in incurred by PPSIs, including both start- million per year once a final rule
which the PPSI cannot form a up costs and recurring administrative became effective. FinCEN and the
reasonable belief that it knows the true and maintenance costs based on Agencies invite comment on whether
identity of a customer would help relevant cost information associated the analysis of the average costs for each
reduce the ability of money launderers, with each identified category of component of the CIP as outlined in
criminals, and other illicit finance required compliance activity. The section VIII.A.4.ii.a is an accurate
actors to access U.S. financial markets discussion of expected costs then reflection of the cost faced by issuers of
through PPSIs. Maintaining records describes potential costs to PPSI products that may be considered
would enhance PPSI’s internal customers and concludes with an payment stablecoins. In addition,
compliance efforts and aid PPSI and estimate of government implementation FinCEN and the Agencies request
enforcement personnel in detecting and costs for oversight and enforcement. comment on whether there are any
taking measures to prevent potential The sum of the proposed rule’s additional cost categories that FinCEN
illicit finance activity. Establishing a expected incremental quantified costs and the Agencies have failed to
CIP with these elements would help (unadjusted) over a multi-year time consider.
TABLE 4—QUANTIFIED INCREMENTAL COSTS OF THE PROPOSED RULE BY YEAR
3-Year
Affected party Year (¥1) Year 1 Year 2 Year 3 average
PPSIs ................................................................................... ........................ $283,572 $238,723 $238,723 $253,673
New PPSI Customers .......................................................... ........................ 1,025,400 1,025,400 1,025,400 1,025,400
Government ......................................................................... 981,698 1,347,789 912,634 912,634 1,057,686
Annual Incremental Costs .................................................... 981,698 2,656,761 2,176,757 2,176,757 2,336,758
a. PPSIs must also use this approach to establish existing customer identification
and maintain a well-designed, written practices. Creating or modifying the
1. Establishing and Maintaining a
CIP that establishes and maintains the policies and procedures detailed in the
Written CIP
operational framework for executing CIP would entail costs for these entities.
The proposed rule would require a effective identity verification. Such entities may incur costs both
PPSI to establish and maintain a CIP If an entity that becomes a PPSI does while implementing new or modified
aligned with, and integrated into, its not already have a CIP that is consistent policies and procedures, as well as
broader risk-based and reasonably with the proposed rule’s requirements, when newly programming, or modifying
designed AML/CFT program. As that prospective PPSI would have to existing programming of, their
described in section VIII.3.ii, a PPSI newly establish or else modify its automated systems and testing those
151 Hourly burden figures presented for cost three-year time horizon to be $688,399 ($718,797) the PRA recordkeeping and reporting activities
estimates in this section are rounded to the nearest using a 7 percent (3 percent) discount rate, required by the proposed rule, even if such
hundredth of an hour for presentation purposes. respectively. This equates to annualized costs of activities are already being conducted by the
Total burden figures are produced using unrounded $254,695 ($254,117) using the same discount rates, respondents.
lotter on DSK8BHNXB4PROD with PROPOSALS2
figures for accuracy. or $5,094 ($5,082) per year per PPSI on average. 154 As described in infra section VIII.A.4.ii.b,
152 The corresponding net present value (NPV) of 153 Note, the incremental costs presented in this these costs are essentially identical to those
the aggregate costs displayed in Table 4 are $5.8 subsection differ in several aspects from the PRA incurred as a result of general AML/CFT program
million ($6.6 million) using a seven percent (three recordkeeping and reporting costs presented below requirements. Therefore, these costs should not be
percent) discount rate, or an average annualized (see infra section VIII.E). The cost totals presented considered as being in addition to the customer
aggregate cost of $2.2 million ($2.3 million) in each here reflect the estimated incremental costs that costs contemplated in FinCEN’s accompanying
of the first three years in which a final rule would would result from this proposed rule, while the rulemaking on general AML/CFT program
be effective. Of these costs, the NPV of costs that costs presented in section VIII.E analysis include requirements for PPSIs. See PPSI AML/CFT NPRM,
would be borne by PPSIs is estimated over the same pro forma accounting of all costs associated with at section XII.4.ii, supra note 4.
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37256 Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules
systems. These costs are expected to be this activity would take approximately associated incremental cost of
significantly lower for PPSIs that are ten hours in subsequent years. compliance with the requirement is
subsidiaries of insured depository CIP establishment and maintenance expected to be relatively small for all
institutions, which are currently activities would therefore be expected to PPSIs.
required to have established procedures result in an incremental cost of Despite this, some new costs for PPSIs
in place for obtaining identifying approximately $3,115 per non-IDI can be anticipated because some may
information of customers in compliance subsidiary PPSI, $1,495 per IDI- not be obtaining all the information
with BSA requirements.155 By contrast, subsidiary PPSI,156 and a total collective required by the proposed rule or doing
other PPSIs are less likely to have cost of approximately $107,139 in the so consistently. These issuers would
policies and procedures in place that first year after the proposed rule is face additional costs in collecting this
meet the minimum requirements in the finalized.157 In each subsequent year, information and updating their account
rule, and are therefore expected to face ongoing establishment and maintenance opening applications to insert
higher up-front CIP implementation is expected to result in an average cost procedures requesting that customers
costs. of approximately $1,246 per PPSI, and provide the required information.
These design, implementation, a total average annual cost of The proposed rule would further
documentation, and maintenance costs approximately $62,290 for 50 PPSIs.158 require a PPSI’s CIP to include
are distinct from similar costs to procedures to verify the identity of each
2. Obtaining and Verifying Customer customer and would provide issuers
establish and maintain the PPSI’s
Identification Information with multiple possible methods to do
overall AML/CFT program but would
generally be expected to be guided by The proposed rule would require a so, which would mitigate the costs of
the same principles of risk-based, PPSI’s CIP to include the collection of such activities.159 For example,
allocatively efficient construction. As certain information prior to opening a depending on the procedures
such, CIP implementation costs are new account. This information would implemented—including through
expected to vary not just by whether a include, at a minimum, the name, date documentary or non-documentary
PPSI is affiliated with or is an of birth, address, and identification methods, as provided by the rule—and
institution with a CIP obligation, but number of each customer opening new based on the issuer’s assessment of the
also by the nature of the types of accounts. Centralized stablecoin issuers relevant risks, customers that open
already obtain identifying information accounts with an issuer may simply
accounts the PPSI maintains, the
from customers, such as their names provide a copy of documents showing
methods it provides to open an account,
and addresses, since most issuers need its existence as a legal entity.
the types of identifying information
to uniquely identify each of their Alternatively, issuers may, for example,
available from customers, and the PPSI’s
customers operationally and these obtain a financial statement from the
own unique size, location, and customer
particular forms of personally customer or compare the information
base. However, to simplify the
identifiable information are common provided by the customer with
remainder of the analysis, FinCEN and
ways of doing so. Therefore, the information obtained from a consumer
the Agencies distinguish primarily
reporting agency or public database.
between PPSIs affiliated with a insured The documentary and non-
156 FinCEN notes that because, in its approach to
depository institution or ‘‘IDI’’ (referred documentary verification methods set
calculating expected costs, different costs apply to
to for simplicity as ‘‘IDI-subsidiary PPSIs of various (1) types (e.g., whether a PPSI is forth in the proposed rule to verify the
PPSIs’’) and PPSIs that are not affiliated a subsidiary of an insured depository institution or identities of customers are not meant to
with a subsidiary of an insured not) and (2) sizes, average values may not
be an exclusive list of the appropriate
depository institution (referred to for meaningfully represent the economic cost that any
single, particular PPSI may expect to incur. means of verification. Other reasonable
simplicity as ‘‘non-IDI subsidiary 157 Throughout this analysis, FinCEN and the methods may be available now or in the
PPSIs’’) in developing compliance- Agencies apply an hourly wage rate that is a general future. The purpose of making the rule
related expected cost profiles. FinCEN composite hourly wage rate ($87.61) scaled by a flexible in this regard is to allow
and the Agencies request comment on private sector benefits factor of 1.42 ($124.58 =
$87.61 × 1.42). This incorporates Bureau of Labor
payment stablecoin issuers to select
the share of PPSIs that would likely Statistics (BLS) mean wage data associated with six verification methods that are reasonable
already have CIPs established and occupational codes (11–1010: Chief Executives; 11– and practicable. Methods that are
would therefore not incur the full costs 3021: Computer and Information Systems appropriate for an issuer with a small,
associated with establishing and Managers; 11–3031: Financial Managers; 13–1041:
Compliance Officers; 23–1010: Lawyers and
familiar customer base may not be
maintaining a CIP. Judicial Law Clerks; 43–3099: Financial Clerks, All sufficient for an issuer with more
The average burden, measured in Other) for each of the nine groupings of NAICS customers from many different
time, for a non-IDI subsidiary PPSI to industry codes that FinCEN and the Agencies geographic regions. The proposed rule
establish and maintain a written CIP determined are most directly comparable to its 11
categories of potentially affected financial
recognizes this fact and, therefore,
that encompasses all the regulatory institutions as delineated in 31 CFR parts 1020 to allows an issuer to employ such
elements as grouped and described in 1030. See BLS, May 2024—National industry- verification methods as would be
section VIII.A.3 above is expected to specific and by ownership, available at https:// suitable to form a reasonable belief that
range between approximately 20 to 30 www.bls.gov/oes/tables.htm. Given that many
occupations provide benefits beyond wages (e.g.,
it knows the true identities of its
hours per firm (an average of 25 hours insurance and paid leave), FinCEN and the customers.
per firm). For IDI-subsidiary PPSIs, Agencies apply the private sector benefit factor to FinCEN and the Agencies recognize
these activities are expected to require the unloaded wage rate to reflect the total cost to that obtaining and verifying the identity
about ten to 15 hours per firm (with an the employer. The benefit factor is the ratio of total
lotter on DSK8BHNXB4PROD with PROPOSALS2
compensation (which includes wages and benefits)
of each customer would result in
average of approximately 12 hours per to wages. Total compensation = 43.94 and Wages incremental costs for many PPSIs if
firm) in the first year, depending on and salaries = 30.90 (1.42 = 43.94 ÷ 30.90) as of June these firms currently do not use
each institution’s existing digital 2024, based on the private industry workers series verification methods or do not verify
infrastructure. For both PPSI types, data downloaded from BLS. BLS, Employer Costs
for Employee Compensation data, available at
identities in a way that is consistent
FinCEN estimates annually, on average, https://www.bls.gov/news.release/archives/ecec_ with the proposed rule’s requirements.
09102024.pdf.
155 31 CFR 1020.220. 158 See Tables 9 and 10, infra section VIII.E.3. 159 See proposed § 1033.220(a)(2)(ii).
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Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules 37257
FinCEN and the Agencies also note that rate is 65 percent of the number of each customer. For IDI-subsidiary PPSIs,
this requirement for customer existing customers. Therefore, FinCEN more streamlined incremental
identification information collection expects the average PPSI to collect information collection processes
and verification, which is applied to all information on approximately 650 new associated with the existing CIP
customers equally, is distinct from the customers per year. program of the parent company can be
requirements to conduct customer due Due to the wide range of models anticipated. For this reason, FinCEN
diligence as required in the employed by issuers, FinCEN and the estimates an average time to correspond
accompanying proposed rule on AML/ Agencies acknowledge a range of costs with each customer and collect the
CFT program requirements for PPSIs. for customer information collection and
required information of two minutes.
Unlike generalized CIP collection and verification. However, nearly all
For small PPSIs, FinCEN and the
verification, that due diligence requires stablecoin issuers already collect
significant customer information on Agencies conservatively assume it
prioritized, risk-based screening based
on factors identified by the PPSI. primary market customers in the would take three minutes per PPSI to
As discussed earlier, FinCEN ordinary course of business. collect information from each customer.
estimates that the ‘‘average’’ PPSI would Nevertheless, the customer information In summary, FinCEN expects that the
have approximately 1,000 legal entity collection requirements in this proposal collection of customer information to
clients that it interacts with directly.160 may still entail a relatively small comply with the proposed rule would
The proposed requirements do not incremental burden on a per-customer cost approximately $4,049 per non-IDI
require PPSIs to collect information on basis for non-IDI subsidiary PPSIs, subsidiary PPSI, or a total of $80,977
existing customers,161 and therefore which may be inherently less familiar annually. For IDI-subsidiary PPSIs,
FinCEN only estimate incremental costs with CIP information collection FinCEN and the Agencies expect a per-
for collecting information on new requirements than banks. Nearly all firm cost of approximately $2,699,
customers. As described earlier, FinCEN primary market customers interfacing which results in approximately $80,977
and the Agencies used public data on with stablecoin issuers directly are legal
annually for all firms of this type.162
on-chain minting and redemption entities, and FinCEN estimates that non-
Table 5 below provides a comparative
activity to examine annual rates of IDI subsidiary PPSIs would require an
customer growth and turnover, and average of three minutes collect any summary of these costs for each PPSI
estimate that the average new customer additional required information from type.
TABLE 5—ESTIMATED ANNUAL INCREMENTAL COST ASSOCIATED WITH OBTAINING AND VERIFYING CUSTOMER
IDENTIFICATION INFORMATION BY PPSI TYPE
Hours per Number of Total burden
PPSI type Cost per PPSI Total cost
PPSI PPSIs hours
Non-IDI Subsidiary PPSIs .................................................... 32.5 $4,049 20 650 $80,977
IDI-Subsidiary PPSIs ........................................................... 21.7 2,699 30 650 80,977
3. Recordkeeping per PPSI per year, the corresponding financial institutions that are U.S.
incremental storage cost would be $165 persons because an obligation already
The proposed rule requires certain per PPSI per year, or an aggregate total exists for such U.S. persons to check
records to be retained for a five-year of $8,250 annually for a population of their customers against the Specially
period following the creation of the 50 PPSIs. Designated Nationals (SDN) List
record 163 and others to be retained for
4. Comparing Customers With administered by OFAC. While the
five years following an account
Government Lists burden associated with this evaluation
closure.164 While FinCEN and the
of customers against the SDN List is also
Agencies generally expect PPSIs to The proposed rule would require a considered as part of the separate
utilize the same technological PPSI’s CIP to include reasonable proposed rule to impose AML/CFT
infrastructure to securely store CIP- procedures for determining whether a
specific records as they would all other program and sanctions compliance
customer appears on any list of known
business/operation-related data, it is program requirements on PPSIs,166
or suspected terrorists or terrorist
nevertheless foreseeable that some failure to comply with current
organizations issued by any Federal
incremental costs might accrue. To obligations, such as by engaging in
government agency and designated as
allow for this, FinCEN includes a PRA appropriate customer screening, could
such by Treasury in consultation with
recordkeeping cost for non-labor, the Federal payment stablecoin result in criminal or civil penalties for
technology costs that include an annual regulators. Such a list has not yet been a stablecoin issuer.
$100 baseline storage cost for each PPSI issued. Since a list as described in proposed
and a per-record cost of $0.10 associated Nevertheless, similar list-checking § 1033.220(a)(4) has not yet been issued,
with storing customer records.165 Based activities should already be industry and to a certain extent the prospective
on an estimate of 650 new customers practice by stablecoin issuers and other requirement to compare customers
lotter on DSK8BHNXB4PROD with PROPOSALS2
160 See supra section VIII.A.2.b. would have reason to believe they know the true 164 These records include the customer
161 Under the proposed rule, PPSIs would not be identity of their customers. identification information required before an
162 See also Tables 9 and 10, infra section VIII.E.3.
required to collect information from existing account is opened as described in proposed
163 These records pertain to the methods and
customers unless there is reason to believe the § 1033.220(a)(3)(i)(A). For the recordkeeping
issuer does not know the true identity of a information used to verify customer identification requirement, see proposed § 1033.220(a)(3)(ii).
information and are described in proposed
customer, a scenario that FinCEN anticipates would 165 See infra section VIII.E.2.iii.
§ 1033.220(a)(3)(i)(B), (C), and (D). For the
be uncommon. FinCEN requests comment on recordkeeping requirement, see proposed
166 See PPSI AML/CFT NPRM, supra note 4.
whether it is reasonable to assume that all PPSIs § 1033.220(a)(3)(ii).
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37258 Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules
against a future list reinforces existing 10,000. As described in section collect and provide identifying
market practices, the cost resulting from VIII.A.2.ii.b, these non-individual information to a PPSI, including as
this requirement is currently expected persons, legal entities, or other necessary to satisfy a PPSI’s general
to be de minimis. businesses belong to several categories, AML/CFT program requirements. Some
including digital exchanges, specialized customers may be required to submit
5. Providing Notice to Customers
digital commodities traders, and other information to identify themselves and
The proposed rule would require a types of investment- and securities- support a PPSI’s required verification
PPSI’s CIP to include procedures for related businesses that, aside from activities, and in some cases, submit
providing its customers with adequate digital exchanges, would generally all additional information about select key
notice that the issuer is requesting be classified under NAICS code 523 individuals associated with the
information to verify their identities.167 (‘‘Securities, Commodity Contracts, and customer in order for a PPSI to satisfy
Proposed § 1033.220(a)(5)(ii) sets forth Other Financial Investments and its separate needs to meet certain
general adequacy standards for the Related Activities’’). Accordingly, general AML/CFT program
content of a notice and states that notice $102.54 was used to estimate hourly requirements and requirements unique
may be provided in a manner costs to PPSI customers.169 to its CIP. However, the collection and
reasonably designed to ensure that a FinCEN estimates that PPSI production of this information by the
customer is able to view the notice, or customers, which are mostly financial customer is generally the same, or a
is otherwise given notice, before institutions engaged in trading a broad highly overlapping, set of activities.
opening an account. For example, if an range of stablecoin products as part of Therefore, the customer costs presented
account is opened electronically, such their investment portfolios, or here should not be treated as strictly
as through an internet website, the exchanges seeking to provide off-chain additive to the customer costs
issuer may provide notice liquidity to retail customers for a articulated in FinCEN’s rulemaking that
electronically. Because the notice is a similarly broad range of stablecoin proposes general AML/CFT program
standardized disclosure included with products, will likely initiate at least one requirements for PPSIs.
all applications, FinCEN does not new primary market relationship each
anticipate a per-customer burden, but year, although this frequency may c. Government Costs
rather a one-time upfront cost to add the fluctuate. In order to generate a To implement the proposed rule,
notice to application materials. FinCEN conservative estimate, FinCEN and the FinCEN anticipates incurring certain
also allows for an average one-hour Agencies assume for purposes of this operating costs that would include
ongoing annual burden to review and analysis that all primary market approximately $0.98 million in the year
update the notice if necessary. Because participants would be required to prior to the final rule’s effective date,
proposed § 1033.220(a)(5)(iii) provides provide this information at least once $1.35 million in the first effective year
sample notice text, the expected burden during the course of business in a given the rule is in effect, and approximately
of preparing or revising the textual year when interacting with a new PPSI, $0.91 million per average subsequent
content of a PPSI’s notice is expected to while acknowledging significant year. These estimates include
take proportionately less time and effort uncertainty around this estimate. anticipated expenses related to
than a PPSI’s other presentation-related FinCEN and the Agencies request public rulemaking and maintenance,
business-specific decisions, such as comment on this assumption. stakeholder outreach and informational
location (as banner text online, inline on Assuming that 10,000 customers support, compliance monitoring, and
a form, etc.) and accessibility (including would spend, on average, approximately potential enforcement activities as well
formatting, number of languages/ one hour to collect, review, and transmit as certain incremental increases to pre-
translations to provide, number of the required customer identification existing administrative and logistic
distinct locations, methods of information to its PPSI counterparties expenses.
messaging, and platforms to place each year, this would imply that costs FinCEN acknowledges that this
notice), among other attributes, which to PPSI customers could be as much as treatment of cost estimates implicitly
FinCEN and the Agencies expect to be $1.03 million annually. assumes that increased resources
informed by a PPSI’s approach to risk- This estimate is highly conservative commensurate with any novel operating
based and reasonably designed and likely to overestimate the true costs would exist. If this assumption
programs, generally. incremental costs of the proposed CIP does not hold, then operating costs
FinCEN estimates that the average requirements to PPSI customers for a associated with a rule may impose
annual cost for this activity would be number of reasons. For one, it assumes certain economic costs on the public in
approximately $124.58 per PPSI, that all primary market participants will the form of opportunity costs from the
yielding an aggregate average annual be required to provide this information agency’s forgone alternative activities
cost of approximately $6,229 for 50 once during the course of business in and those activities’ attendant benefits.
expected PPSIs.168 any given year as a function of opening Putting that into the context of this
b. PPSI Customers or attempting to newly open an account proposed rule, and benchmarking
with a PPSI, which may not be true for against FinCEN’s actual appropriated
As presented above in section many customers. Additionally, these budget for fiscal year 2025
VIII.A.2.ii.b, the typical stablecoin costs may be included, or otherwise ($190,193,000),170 the corresponding
issuer that could be considered a indistinguishable from customer costs
payment stablecoin issuer would have opportunity cost could resemble
attributable to other business reasons to forgoing up to 0.7 percent (0.5 percent)
lotter on DSK8BHNXB4PROD with PROPOSALS2
approximately 100 legal entity clients
that it interacts with directly and the of current activities in the first year
169 Based on a BLS mean industry hourly wage
population of unique prospective PPSI (each subsequent year) in which a final
rate of $72.11. BLS, Occupational Employment and
customers that could be affected parties Wage Statistics: Industry: Securities, Commodity rule was effective. However, to the
Contracts, and Other Financial Investments and
as U.S. legal persons is no more than Related Activities (May 2024), available at https:// 170 FinCEN, Congressional Budget Justification FY
data.bls.gov/oes/#/industry/523000. The BLS mean 2026 (May 2025), available at https://
167 See proposed § 1033.220(a)(5)(i).
industry hourly wage rate of $72.11 was scaled by home.treasury.gov/system/files/266/11.-FinCEN-FY-
168 See Tables 9 and 10, infra section VIII.E.3. a benefits factor of 1.42. See supra note 157. 2026-CJ.pdf.
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Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules 37259
extent that activities FinCEN would significant benefits, but is also Blockchains are by nature decentralized
undertake as a function of the proposed practically challenging. Almost all algorithms, so there is often no central
rule would functionally substitute for or (approximately 99 percent) of stablecoin collection point at which identifying
otherwise replace forgone activities, transaction activity takes place on the information is collected.
such an estimate likely overstates the secondary market. In addition to most This being the case, FinCEN and the
potential economic costs to FinCEN transaction volume occurring in the Agencies opted to confine the definition
and, consequently, the public. secondary market, nearly all users of of customer for the purpose of customer
These estimates do not include the payment stablecoin products are information collection under the
potential costs borne by other regulators secondary market users, as most large proposed rule to those undertaking
or entities engaged in informational payment stablecoin issuers set primary market transactions directly
outreach,