NPRM: Permitted Payment Stablecoin Issuer Customer Identification Program (91 FR 37234) (Part 3 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.
examinations, or related significant financial requirements for with the issuer.
supervisory actions of enforcement primary market participants that ii. Alternative Information
activities as a consequence of the exclude retail traders. Requirements
proposal. Consequently, the cost Despite this being the location of
estimates here may understate the significant activity, and potentially Another alternative that FinCEN and
burden of activities required to promote significant risk, issuers have a limited the Agencies considered was requiring
compliance with the rules as proposed ability to collect customer information customers to provide additional
and the full scope of government costs. on the secondary market. The secondary information beyond what is required by
market includes both ‘‘on-chain’’ the proposed rule. The proposed rule
5. Consideration of Policy Alternatives transactions (actual blockchain would require issuers to collect, at a
FinCEN and the Agencies considered exchanges of digital assets) and ‘‘off- minimum, the name, address, and
several alternatives to the currently chain’’ transactions (ledger/book government-issued identification
proposed version of the rule, but is transactions made by third-party number or incorporation document for
limiting the presentation here to exchanges for which no evidence legal entity customers. For instance,
considerations where public response appears on the blockchain). Market FinCEN and the Agencies might have
may be most useful. Some of the participants tend to use the two types of required customers to provide any
alternatives described below are secondary trading for different blockchain wallet addresses associated
scenarios that may have resulted in purposes. On-chain transactions with a legal entity, incorporation or tax
reduced burdens for PPSIs but would do typically include digital asset documents, or certain identifying
so at the expense of forgone benefits or transactions (such as arbitrage trading or financial information such as account
efficiency gains. Other alternatives numbers. However, FinCEN and the
institutional flows) and a small portion
Agencies opted not to require these
would have resulted in more significant of direct payments for purposes like
items for several reasons. First, many
burdens. For the reasons described remittances across international borders.
issuers already collect this additional
below, FinCEN and the Agencies Off-chain transactions are where most
information in the ordinary course of
decided not to propose any of these retail trading takes place. The ratio of
business, and are best situated to
alternatives. FinCEN and the Agencies on-chain to off-chain transaction
determine what, if any, additional
invite comment on these alternatives, activity varies significantly by product,
information is necessary to make risk-
and on any other alternatives that were but in the aggregate, a majority of
based decisions about a customer.
not considered here. transaction volume for likely payment
Second, the absence of this information
stablecoin products occurs off-chain.173
i. Alternative Definitions of ‘‘Customer’’ does not exempt an issuer from the
Even for products where most
FinCEN and the Agencies considered responsibility to assess the money
transaction volume occurs on-chain, a
adopting wider definitions of laundering and terrorist financing risks
majority of the actual economic value
‘‘customer’’ to encompass additional associated with a customer or their
for these products is typically held in
market activity, namely on the transactions. Given this broader
the wallets of exchange providers for
secondary market. While the PPSI AML/ programmatic obligation, little may be
off-chain trading. For either type of
CFT NPRM does propose some lost in letting it remain the issuer’s
activity, it is most often the case that no
requirements for PPSIs with regard to prerogative to determine when or
customer information is collected in
secondary market activity,171 this whether such additional information is
secondary market transactions by the
proposed rule limits customer necessary.
stablecoin issuer itself.
information collection with regard to Many exchange operators facilitating iii. Size-Related Alternatives
the CIP to primary market customers off-chain activity collect customer FinCEN and the Agencies considered
(i.e., such as when a PPSI engages in information in a manner similar to the modifying the proposed rule’s
issuing, converting, redeeming, information collected by issuers for requirements for small payment
repurchasing, burning, and reissuing their primary market customers. stablecoin issuers or establishing an
payment stablecoins, as well as However, exchanges rarely share this asset threshold for certain compliance
providing associated services, such as information with issuers. For secondary obligations of payment stablecoin
providing custodial services).172 market customers trading stablecoins on issuers that are not bank subsidiaries.
Collecting information on secondary the blockchain itself, identities are often As discussed in more detail in the IRFA
market customers would have anonymous or pseudonymous. (section VIII.C.1.ii.b), FinCEN utilizes a
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171 See PPSI AML/CFT NPRM, supra note 4. 173 Among the four largest payment stablecoin
threshold of $200 million in total
172 PPSIs may also engage in ‘‘digital asset service products evaluated by FinCEN, about 35 percent of
reserve assets to identify small payment
provider’’ activities (as specified in the GENIUS the total trading volume was estimated to occur on- stablecoin issuers that are not
Act), and activities incidental thereto, that are chain. However, this varied significantly by subsidiaries of insured depository
authorized by a primary Federal payment stablecoin product, and two of the products examined had institutions. FinCEN and the Agencies
regulator or State payment stablecoin regulator, significantly more relative trading volume on-chain.
consistent with applicable law. Such activities The location of secondary market activity depends
considered using this threshold as a
include exchanging and transferring digital assets. heavily on the way in which the product is used tailoring benchmark, whereby issuers
See 12 U.S.C. 5901(7), 5903(a)(7)(B). and how it is marketed. under the threshold would be allowed
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37260 Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules
to apply for PPSI status under lessened studies, data, or other evidence—are institutions; FQPSIs; 180 and SQPSIs.181
CIP standards designed to reduce invited. FinCEN has incorporated the Agencies’
compliance cost. However, FinCEN and RFA analyses with respect to their
the Agencies opted against this i. The Proposed Rule: Objectives, nexuses with these respective types and
alternative. Creating some category of Description, and Legal Basis limited its own further analysis below to
PPSI subject to lessened CIP The proposed rule would implement the remaining potential future PPSIs
requirements would conceivably result FinCEN’s regulations that prescribe the that it anticipates. As the proposed
in the targeting of these issuers by illicit minimum requirements for CIPs for rulemaking may also affect the small
actors seeking to circumvent regulatory PPSIs as described earlier in section V. entities that are customers of PPSIs, this
scrutiny. Further, FinCEN’s analysis population was also subject to IRFA
indicates that most technology services The legal basis for the proposed rule requirements and is included in section
that enable customer information is the GENIUS Act.174 The GENIUS Act VIII.C.1.ii.c below.
collection as described here are highly creates a regulatory framework for
payment stablecoins in the United a. Small PPSIs Considered by the
scalable, allowing small issuers to
States.175 Under the GENIUS Act, it Agencies
readily identify and employ more cost-
effective options. generally will be unlawful for any Analyses of the expected impact on
person other than a PPSI to issue a PPSIs that would be subject to their
B. Executive Orders 12866, 13563, and payment stablecoin in the United jurisdiction were conducted by each of
14192 States.176 The GENIUS Act outlines the Agencies and are appended with
E.O. 12866 directs agencies to assess certain reserve, capital, liquidity, and their respective certifications in sections
the costs and benefits of available risk management requirements for PPSIs VIII.C.2, 3, 4, and 5 below.
regulatory alternatives and, if regulation and tasks implementing those b. Other Potential Small PPSIs
is necessary, to select regulatory requirements to the Agencies, and, as
approaches that maximize net benefits applicable, State payment stablecoin The U.S. Small Business
(including potential economic, regulators.177 Administration (SBA) definition of
environmental, and public health and ‘‘small entity’’ as defined in 13 CFR
The GENIUS Act requires that a PPSI 121.201 includes businesses, nonprofits,
safety effects; distributive impacts; and ‘‘be treated as a financial institution for
equity). E.O. 13563 emphasizes the and small government entities with
purposes of the Bank Secrecy Act, and fewer than 50,000 residents.182
importance of quantifying both costs as such, shall be subject to all Federal
and benefits, reducing costs, Based on analysis of the distributional
laws applicable to financial institutions data separately analyzed by FinCEN in
harmonizing rules, and promoting located in the United States relating to
flexibility. E.O. 13563 also recognizes the IRFA accompanying the PPSI AML/
economic sanctions, preventing money CFT NPRM, FinCEN considered
that some benefits are difficult to
laundering, customer identification, and applying a functional definition of
quantify and provides that, where
due diligence.’’ 178 In addition to its ‘‘small entity’’ for purposes of this IRFA
appropriate and permitted by law,
general directive, the GENIUS Act that would correspond closely to the
agencies may consider and discuss
specifies that a PPSI’s obligations must 80th percentile threshold, which was
qualitatively values that are difficult or
include maintenance of an effective CIP, rounded to $200 million for
impossible to quantify.
including identifying and verifying the convenience in that proposed rule and
This proposed rule has been
PPSI’s account holders.179 is requesting comment on the
designated a ‘‘significant regulatory
action’’ under E.O. 12866; accordingly, The proposed rule would implement appropriateness of the $200 million
it has been reviewed by OMB. the GENIUS Act by proposing a threshold in both that NPRM and this
requirement for PPSIs to maintain an proposed rule.
This action, if finalized, is expected to
effective CIP, including identification The proposed $200 million threshold
be considered an E.O. 14192 regulatory
and verification of account holders. It would capture approximately 76
action.
includes requirements related to percent of current stablecoin issuers that
C. Regulatory Flexibility Analysis documenting customer verification meet the GENIUS Act definitional
procedures, requisite customer criteria to be eligible for potential future
When an agency issues a proposed
information, required recordkeeping, PPSI status. That is, of the pre-GENIUS
rulemaking, the RFA requires the agency
comparison with government lists, and Act population of 25 stablecoin issuers
either to provide an IRFA with a
customer notification. that may be eligible to meet the GENIUS
proposed rule or certify that the
Act’s definitional criteria for future
proposed rule would not have a ii. The Expected Impact on Small PPSIs (see Table 1), 19 had fewer than
significant economic impact on a
Entities $200 million in total circulating
substantial number of small entities.
payment stablecoin product values.
1. FinCEN IRFA The expected impact of the rule on Together, these 76 percent of current
small entities varies across three distinct
Because the proposed rule may have types of PPSIs: those that are 180 12 U.S.C. 5901(11). In the PPSI AML/CFT
a significant economic impact on a subsidiaries of insured depository NPRM FinCEN proposes to define this category in
substantial number of certain types of its regulations (see proposed § 1010.100(vvv)) using
PPSIs that may qualify as small entities, 174 See supra section II.
essentially the same language as the statutory
definition. See PPSI AML/CFT NPRM, supra note
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FinCEN undertook the following 175 See generally 12 U.S.C. 5901–5916.
4, at section VI.C.1.xi.
analysis. In the event that FinCEN has 176 See 12 U.S.C. 5902(a), 5901(23) (defining 181 12 U.S.C. 5901(31). In the PPSI AML/CFT
potentially overestimated the ‘‘permitted payment stablecoin issuer’’); see also 12 NPRM, FinCEN proposes to define this category in
anticipated scope and significance of U.S.C. 5902(c) (permitting, but not requiring, its regulations (see CFR 1010.100(xxx)) using
Treasury to issue regulations providing limited safe essentially the same language as the statutory
the economic burden of the proposed harbors from 12 U.S.C. 5902(a)); 12 U.S.C. 5916. definition. See PPSI AML/CFT NPRM, supra note
rule on small entities, and certification 177 12 U.S.C. 5903(a)(4).
4, at section VI.C.1.xiii.
would instead be more appropriate, 178 12 U.S.C. 5903(a)(5)(A). 182 Some stablecoin issuers are organized as
comments to this effect—including 179 12 U.S.C. 5903(a)(5)(A)(v). nonprofit entities and are included in this count.
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Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules 37261
stablecoin issuers hold less than one examined actual revenue values as returns. For example, stablecoin issuers
percent of aggregate market average total reported by current stablecoin issuers may offer certain fee-based services to
assets. and compiled in quarterly MSB Call customers, and may account for certain
To examine the expected impact of Report data. While five percent of total unrealized gains as revenue, increasing
the proposed rule on small entities, assets was generally within the same reported revenue levels.
FinCEN used two steps: the first step order of magnitude to actual reported Bearing these factors in mind, FinCEN
was to estimate the total number of revenue, actual revenues often exceeded retained five percent of total assets as a
potential future small entities that five percent. reasonable benchmark for revenue. This
would be affected by the proposed rule, Returns in excess of prevailing rates
parameter was chosen in order to retain
and the second step was to estimate the for government-issued fixed income
an estimate of revenue that does not
significance of this impact on those securities can be due to several factors.
entities. First, stablecoin issuers often ‘‘over minimize costs or possible fluctuations
In order to contextualize the relative collateralize’’ their products, meaning in returns. In other words, by using a
significance of costs associated with the that they hold larger reserve portfolios conservative but realistic estimate,
proposed rule for small PPSIs, FinCEN than are required to redeem every coin FinCEN avoids underestimating the
used estimates of total assets to estimate at par value. This practice helps protect relative impact of compliance costs
likely revenues for such issuers. from market fluctuations and affords associated with the proposed rule.
Stablecoin issuers generally derive issuers greater flexibility during times of FinCEN requests comment on the
revenue from investment returns on financial stress. In such cases, appropriateness of using five percent of
their reserve holdings. As described in stablecoin issuers have reserve total reserve assets as an estimate of
the GENIUS Act, PPSIs would be portfolios that are larger than the these firms’ revenue.
permitted to invest reserve funds in circulating value of their products, In section VIII.A.4.ii, FinCEN
several different types of asset classes, leading to returns in excess of those discussed the expected incremental
including government-backed securities. implied by multiplying their circulating costs of compliance with the proposed
Based on prevailing interest rates, value by prevailing rates of return for rule for PPSIs. As that section detailed,
FinCEN assumed issuers would likely common reserve investments. the incremental first-year costs of the
receive returns of about five percent on Stablecoin issuers may also invest proposed CIP requirements for PPSIs
invested funds. While actual returns excess reserves in higher-yielding not covered by the Agencies’ analyses
may fluctuate and fall below or above products or loans whose rates of return are expected to be approximately $7,500
this estimate, this value represents an exceed those of government-backed per PPSI in the first year, and
benchmark for estimation purposes. To securities. In addition to this, several approximately $5,600 in the average
validate this assumption, FinCEN other factors might lead to larger subsequent year.
TABLE 5—CIP COSTS AS A SHARE OF MODELED ANNUAL REVENUE
Percentage of small issuers for
which Year-1 CIP costs exceed:
Modeled CIP
Year program cost 1% of modeled 3% of modeled
revenue revenue
1 ............................................................................................................................................... $7,500 61 34
2+ ............................................................................................................................................. 5,600 45 26
At this time, FinCEN assesses that Comments and data are invited to assist stablecoin issuers. However, FinCEN
there is insufficient data to forecast with analyzing the potential effects of the estimates that a substantial portion of
meaningful precision the proportion of proposed CIP requirements on small these may be affiliates of a single
the total population of potential future PPSIs, particularly those that would not counterparty or associated with non-
PPSIs that would resemble current be the subsidiaries of insured depository U.S. entities. FinCEN estimates that the
stablecoin issuers that would qualify as institutions. number of affected U.S. businesses is no
small entities or to consider the c. Small Business Customers of PPSIs more than 10,000. These businesses
potential economic significance of the belong to several categories, including
In addition to these entities, FinCEN
proposed CIP requirements expect that the proposed rule, if digital asset exchanges, specialized
differentially by type. FinCEN has adopted, to have impacts on the primary digital commodities traders, and other
therefore provided the analysis in Table market customers of PPSIs. Many of types of investment- and securities-
5 for illustrative purposes only to these entities, which include digital related businesses. Aside from digital
facilitate an assessment of how asset exchanges, specialized asset exchanges, FinCEN expects that
economically significant the proposed commodities traders, and other nearly all of these firms would be part
CIP requirements might be if future investment firms, are small businesses. of the NAICS classifications under
small PPSIs were comparable to current Using the data described earlier,183 industry code 523 (‘‘Securities,
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stablecoin issuers whose products meet FinCEN estimates that there are Commodity Contracts, and Other
the GENIUS Act’s definitional criteria approximately 300,000 primary market Financial Investments and Related
for a future payment stablecoin. customers that interact directly with Activities’’).
183 See supra section VIII.A.2.ii.b.
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37262 Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules
TABLE 6—DESCRIPTION OF PPSI CUSTOMER SMALL ENTITIES
Approximate Average annual rev-
Primary market cus- SBA small-business
number of NAICS code Percentage considered small a enue of small entities b
tomer type threshold
customers
Other Investment Firms 10,000 523 $47 million ................... 97.7% (about 9,770 firms) ............. $1.55 million.
Digital Asset Ex- 300 523210 $47 million ................... 70% (about 210 firms) ................... $5.85 million.
changes c.
a To estimate the number of small entities in NAICS code 523, FinCEN used the U.S. Census 2022 Statistics of U.S. Businesses Data by En-
terprise Receipts Size. U.S. Census, 2022 Statistics of U.S. Businesses Data by Enterprise Receipts Size, available at https://www.census.gov/
data/tables/2022/econ/susb/2022-susb-annual.html. FinCEN calculated the proportion of small businesses in NAICS code 523 with less than $50
million in annual receipts (the closest available threshold). For Digital Asset Exchanges, FinCEN used internal data.
b Revenue data for NAICS code 523 and Digital Asset Exchanges was collected from the U.S. Census 2022 Statistics of U.S. Businesses Data
by Enterprise Receipts Size and internal data, respectively.
c Note, these 300 customers are a subset of the 10,000 customers captured under NAICS code 523.
While a substantial number of these customer information collection as classifies the economic impact on an
firms would be required to provide described here are highly scalable, individual small entity as significant if
customer information to the PPSIs they allowing small issuers to readily the total estimated impact in one year is
wish to engage in direct transactions identify and employ more cost-effective greater than five percent of the small
with, the cost of providing this options. entity’s total annual salaries and
information is expected to be de In addition, as discussed in greater benefits or greater than 2.5 percent of
minimis relative to the average revenue detail in section VIII.A.5.ii, FinCEN also the small entity’s total non-interest
of these firms.184 Therefore, while a considered adopting additional expense. Furthermore, the OCC
substantial number of businesses may information reporting requirements for considers five percent or more of OCC-
be providing information to PPSIs, new customers. Because some primary supervised small entities to be a
FinCEN does not contemplate that this market customers of potential PPSIs substantial number, and at present, 30
requirement would constitute a may themselves be small businesses, OCC-supervised small entities would
significant effect when considered in such a requirement that expanded constitute a substantial number.
relation to their overall revenue. reporting requirements beyond what In the OCC’s NPRM published March
information is already provided in the 2, 2026, the OCC stated, ‘‘Given that all
iii. Other Matters: Duplicate, ordinary course of business may have
Overlapping, Conflicting, and current OCC banks that issue
presented an incremental cost for some stablecoins generally have issuance of
Alternative Requirements number of these small entities. over $1 billion and are not considered
FinCEN is unaware of any existing However, as discussed in section small entities and the lack of small
Federal regulations that would overlap VIII.A.5.ii, FinCEN opted not to entity stablecoin issuers, the OCC will
or conflict with the proposed rule. As augment these requirements. Many need to wait for more information to
discussed in section III, in a related, issuers already collect this additional determine whether it is likely that there
complementary rulemaking FinCEN is information in the course of business, will be a significant number of small
proposing to apply additional GENIUS and are best situated to determine what, entities affected by the proposed rule.
Act and BSA obligations on PPSIs, if any, additional information is At this time, the OCC does not expect
including, for example, AML/CFT necessary to support overall AML/CFT that the proposed rule would have a
program requirements and suspicious goals. As a result, FinCEN expect no significant impact on a substantial
activity reporting requirements. This incremental cost burden to small entity number of small entities under the
rulemaking deals exclusively with a CIP customers of potential PPSIs as a result RFA.’’ 187
requirement, which is not contained of the requirements in the proposed The OCC continues to expect that
within the related, complementary rule. small entities will not be the initial
rulemaking.
Additionally, FinCEN has considered 2. OCC Certification adopters of this technology because of
certain alternatives to the proposed rule The proposal will apply to entities the compliance infrastructure and
that take into consideration the overseen by the OCC. The OCC capital necessary to support stablecoin
expected costs and potential benefits to currently supervises 997 institutions issuance. As such, the OCC anticipates
small entities. As discussed in greater (national banks, Federal savings that future FQPSIs would not be small
detail in section VIII.A.5.iii, FinCEN associations, and branches or agencies entities as defined by the SBA (currently
considered modifying the requirements of foreign banks),185 of which $850 million in assets for financial
for small entities. As discussed in that approximately 609 are small entities entities). Hence, the proposed rule
section, FinCEN opted against this under the RFA.186 In general, the OCC would not have a significant impact on
exclusion for several reasons. By a substantial number of small entities
creating some category of PPSI for small 185 Financial Institution Data Retrieval System
issuers that would be subject to lessened Data, accessed February 20, 2026. averaging the assets reported on its four quarterly
186 The OCC estimated the number of small financial statements for the preceding year.’’ See
CIP requirements could conceivably footnote 8 of the SBA, Table of Small Business Size
entities based on the SBA’s size thresholds for
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lead to illicit actors who seek to commercial banks and savings institutions, and Standards (Mar. 17, 2023), available at https://
circumvent regulatory scrutiny targeting trust companies, which are $850 million and $47 www.sba.gov/document/support-table-size-
these small issuers. Additionally, million, respectively. Consistent with the General standards.
Principles of Affiliation 13 CFR 121.103(a), the OCC 187 OCC, Implementing the Guiding and
FinCEN analysis indicates that most
counted the assets of affiliated financial institutions Establishing National Innovation for U.S.
technology services that enable when determining if it should classify an OCC- Stablecoins Act for the Issuance of Stablecoins by
supervised institution as a small entity. The OCC Entities Subject to the Jurisdiction of the Office of
184 This cost is estimated to be less than $200 per used December 31, 2024, to determine size because the Comptroller of the Currency, 91 FR 10202 (Mar.
firm annually, on average. See section VIII.A.4.ii.b. a ‘‘financial institution’s assets are determined by 2, 2026).
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Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules 37263
under the OCC’s purview for purposes significant economic impact on a iii. Description of the Compliance
of the RFA. substantial number of small entities. Requirements of the Proposal and
Nevertheless, the Board is publishing Estimate of the Number of Small
3. Board IRFA
and inviting comment on this initial Entities
The Board is providing an initial regulatory flexibility analysis. The proposed rule would implement
regulatory flexibility analysis with
i. Reasons Why Action Is Being the GENIUS Act by proposing a
respect to this proposal. The RFA
Considered by the Board requirement for PPSIs to maintain an
requires an agency to consider whether
effective CIP, including identification
the rules it proposes will have a As explained above, this proposal and verification of account holders. The
significant economic impact on a implements the GENIUS Act’s directives proposed rule includes requirements for
substantial number of small entities. to treat PPSIs as financial institutions Board-supervised PPSIs of all sizes
Under regulations issued by the SBA, a for purposes of the BSA and to require related to documenting customer
‘‘small’’ entity includes a depository such issuers to maintain an ‘‘effective verification procedures, requisite
institution, bank holding company, or customer identification program, customer information, required
savings and loan holding company with including identification and verification recordkeeping, comparison with
total assets of $850 million or less.188 of account holders.’’ 190 The proposed government lists, and customer
For purposes of this section, any
rule would subject PPSIs to CIP notification. The compliance burdens
reference to ‘‘small’’ entities is a
requirements that are comparable to are described in more detail in section
reference to this definition.
In connection with a proposed rule, existing CIP requirements for other VIII.A.4.ii above.
financial institutions, such as banks, This NPRM is being issued jointly by
the RFA requires an agency to prepare
broker-dealers, mutual funds, and FCMs FinCEN, along with the Board and other
an IRFA describing the impact of the
and IBCs. It also would require a PPSI Agencies as applied to the PPSIs that
rule on small entities, unless the head
to tailor its CIP to that PPSI’s size and each Agency supervises. The expected
of the agency certifies that the proposed
type of business, as well as take into impact on PPSIs that are subject to the
rule, if promulgated, will not have a
consideration the PPSI’s risk based on Board’s jurisdiction is analyzed below.
significant economic impact on a The proposed rule would apply to (i)
substantial number of small entities and its unique business—including the
types of accounts it has, how those subsidiaries of insured State member
publishes such certification along with banks that have been approved by the
a statement providing the factual basis accounts are opened, and the
identifying information available. Board to issue payment stablecoins and
for such certification in the Federal (ii) State-qualified PPSIs that are
Register. An IRFA must contain (1) a ii. The Objectives of, and Legal Basis uninsured State-chartered depository
description of the reasons why action by for, the Proposal institutions that have transitioned to the
the agency is being considered; (2) a
The proposed rule would prescribe Board’s regulatory framework under
succinct statement of the objectives of,
the minimum requirements for CIPs for section 4(d) of the GENIUS Act (12
and legal basis for, the proposed rule;
PPSIs as described earlier in section V. U.S.C. 5903(d)). By definition, the
(3) a description of, and, where feasible,
proposed rule would only apply to a
an estimate of the number of small Section 4(a)(5)(A) of the GENIUS Act State-qualified PPSIs that have an
entities to which the proposed rule will (12 U.S.C. 5903(a)(5)(A)) requires that a outstanding issuance value of more than
apply; (4) a description of the projected PPSI ‘‘be treated as a financial $10 billion, and accordingly, would not
reporting, recordkeeping, and other institution for purposes of the Bank be considered small for the purposes of
compliance requirements of the Secrecy Act, and as such, shall be this IRFA. This analysis therefore
proposed rule, including an estimate of subject to all Federal laws applicable to focuses only on Board-supervised PPSIs
the classes of small entities that will be financial institutions located in the that are subsidiaries of State member
subject to the requirement and the type United States relating to economic banks. The Board is not aware of any
of professional skills necessary for sanctions, preventing money method of determining the identity,
preparation of the report or record; (5) laundering, customer identification, and industry, or size of Board-supervised
an identification, to the extent due diligence.’’ 191 Additionally, section PPSIs that are subsidiaries of State
practicable, of all relevant Federal rules 4(a)(5)(A) specifies that a PPSI must member banks, given that there are no
which may duplicate, overlap with, or maintain an effective CIP, and must such entities at this time and it is
conflict with the proposed rule; and (6) identify and verify the PPSI’s account difficult to predict how this market will
a description of any significant holders.192 develop. Further, SBA regulations do
alternatives to the proposed rule which The proposed rule would implement not provide small entity thresholds
accomplish its stated objectives and the GENIUS Act by proposing a specific to PPSIs. As a result, this
minimize any significant economic requirement for PPSIs to maintain an section of the IRFA discusses the size of
impact of the proposed rule on small effective CIP, including identification the parent State member banks of such
entities.189 and verification of account holders. The PPSIs. The Board believes this approach
The Board has considered the proposed rule includes requirements is appropriate because, under the
potential impact of the proposed rule on related to documenting customer GENIUS Act, an insured State member
small entities in accordance with the verification procedures, requisite bank must have ‘‘control’’ of a Board-
RFA. Based on its analysis and for the customer information, required supervised PPSI.193
reasons stated below, the Board believes recordkeeping, comparison with
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that this proposed rule will not have a government lists, and customer 193 The GENIUS Act defines the term
188 See 13 CFR 121.201. Consistent with the
notification. ‘‘subsidiary’’ by reference to the definition of
‘‘subsidiary’’ in the Federal Deposit Insurance Act,
SBA’s General Principles of Affiliation, the Board which states that a subsidiary includes any
190 See 12 U.S.C. 5903(a)(5)(A)(v); see also 31
includes the assets of all domestic and foreign company which is owned or controlled directly or
affiliates toward the applicable size threshold when U.S.C. 5318(l). indirectly by another company. See 12 U.S.C.
determining whether to classify a particular entity 191 12 U.S.C. 5903(a)(5)(A); see also 31 U.S.C.
5901(32) (‘‘The term ‘‘subsidiary’’ has the meaning
as a small entity. See 13 CFR 121.103. 5318(l). given that term in [12 U.S.C. 1813].’’); see also 12
189 5 U.S.C. 603(b)–(c). 192 12 U.S.C. 5903(a)(5)(A)(v). Continued
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37264 Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules
As of December 31, 2025, there were alternative approaches to discrete unenacted. Under this baseline, no
703 insured State member banks.194 Of aspects of the final rule, as discussed formal federal framework exists to
those institutions, 439 are considered elsewhere in this proposal, most of coordinate and homogenize the issuance
small for the purposes of RFA.195 For which would not significantly change of payment stablecoins, leaving the
this analysis, the Board estimates that the estimated economic impact of the market to operate under a fragmented
between five and ten insured State proposed rule. regulatory framework and limited
member banks may, with the Board’s federal guidance.
vi. Conclusion As previously discussed, the
permission, form a Board-supervised
PPSI subsidiary in the first few years Based on its analysis and for the proposed rule would apply to all PPSIs,
after the finalization of the proposed reasons stated above, the Board believes including FDIC-supervised PPSIs,
rule. Given the early stages of the that the proposed rule is unlikely to which would be subsidiaries of FDIC-
payment stablecoin market, this range have a significant economic impact on supervised institutions.198 As of the
accounts for significant uncertainty a substantial number of small entities. quarter ending September 30, 2025,
regarding the volume of future The Board welcomes comment on all there were 2,772 insured State
participants. The population of Board- aspects of its analysis. In particular, the nonmember banks and State savings
supervised PPSIs that are subsidiaries of Board requests that commenters associations. Of those institutions, 2,064
State member banks could be higher or describe the nature of any impact on are considered ‘‘small’’ for the purposes
lower depending on market demand, small entities and provide empirical of RFA.199
strategic operational choices of insured data to illustrate and support the extent The FDIC recognizes considerable
State member banks and other of the impact. Additionally, the Board uncertainty regarding the number of
institutions eligible to become PPSIs, requests that commenters describe the FDIC-supervised PPSIs that would
and future developments in the digital number of small entities under the RFA emerge under the proposed framework.
landscape. By utilizing this range, the and the impact on small entities. For the purposes of this analysis, the
Board aims to establish an estimate that FDIC estimates that the number of FDIC-
4. FDIC Certification
serves as the basis for evaluating the supervised PPSIs would likely range
economic effects of the proposed rule, The RFA generally requires an between five and 30 in the first few
while acknowledging the inherent agency, in connection with a proposed years after the enactment of the
uncertainty resulting from a lack of rule, to prepare and make available for proposed rule. Given the early stages of
historical precedent. The Board expects public comment an initial regulatory the payment stablecoin market, this
that the insured State member banks flexibility analysis that describes the range accounts for significant
that are most likely to seek to form a impact of the proposed rule on small uncertainty regarding the volume of
Board-supervised PPSI subsidiary entities.196 However, an initial future participants. The population of
initially will be larger institutions with regulatory flexibility analysis is not FDIC-supervised PPSIs under the
the compliance infrastructure and required if the agency certifies that the proposed rule could be higher or lower
capital necessary to support a new proposed rule would not, if depending on market demand, strategic
business line to issue payment promulgated, have a significant operational choices of eligible
stablecoins. As such, the Board economic impact on a substantial institutions, and future developments in
anticipates that most, if not all, insured number of small entities. The SBA has the digital landscape. By utilizing this
State member banks with Board- defined ‘‘small entities’’ to include range, the FDIC aims to establish an
supervised PPSIs would not be small banking organizations with total assets estimate that serves as the basis for
entities as defined by the SBA. Even of less than or equal to $850 million.197 evaluating the economic effects of the
assuming the unlikely scenario that all, Generally, the FDIC considers a proposed rule, while acknowledging the
i.e., the upper-bound number of ten significant economic impact to be a inherent uncertainty resulting from a
insured State member banks, would be quantified effect in excess of five lack of historical precedent.
small and that all ten insured State percent of total annual salaries and Because an FDIC-supervised PPSI
member banks would be significantly benefits or 2.5 percent of total non- must be a subsidiary of an IDI, the FDIC
impacted by the proposed rule, these interest expenses. The FDIC believes expects that the initial adopters of this
impacted entities would comprise a that effects in excess of one or more of technology would likely be larger
very small percentage of small insured these thresholds typically represent institutions with the compliance
State member banks. significant economic impacts for FDIC- infrastructure and capital necessary to
insured institutions. support stablecoin issuance. As such,
iv. Consideration of Duplicative, The FDIC estimates the effects of the the FDIC anticipates that most, if not all,
Overlapping, or Conflicting Rules and required mandates of the proposed rule future PPSIs would not be small entities
Significant Alternatives to the Proposal on small FDIC-supervised entities. For as defined by the SBA. Therefore, the
The Board has not identified any the purposes of this analysis, the FDIC FDIC believes the proposed rule is
Federal statutes or regulations that utilizes a pre-statutory baseline under unlikely to have a significant economic
would duplicate, overlap, or conflict which the GENIUS Act is considered impact on a substantial number of small
with the proposal. The Board is seeking entities.
196 5 U.S.C. 601 et seq.
comment on certain potential However, given the lack of historical
197 The SBA defines a small banking organization
as having $850 million or less in assets and
precedent and the evolving nature of the
U.S.C. 1813(w)(4). In the Federal Deposit Insurance determines an organization’s assets by averaging the payment stablecoin market, the FDIC
lotter on DSK8BHNXB4PROD with PROPOSALS2
Act, the term ‘‘control’’ is defined by reference to assets reported on its four quarterly financial conservatively assumes that, for the
the Bank Holding Company Act. 12 U.S.C. statements for the preceding year. See 13 CFR
1813(w)(5). The Board’s Regulation Y sets out the
purpose of this analysis, all the entities
121.201 (as amended by 87 FR 69118, effective
Board’s presumptions of control and noncontrol December 19, 2022). Following these regulations,
falling within the previously discussed
under the controlling influence prong of the Bank the FDIC uses an FDIC-supervised institution’s
Holding Company Act definition of ‘‘control.’’ See affiliated and acquired assets, averaged over the 198 See 12 U.S.C. 5903(a)(7).
12 CFR part 225, subpart D. preceding four quarters, to determine whether the 199 Federal Financial Institutions Examination
194 Call Report Data, December 31, 2025.
FDIC-supervised institution is ‘‘small’’ for the Council Reports of Condition and Income (Call
195 Call Report Data, December 31, 2025. purposes of the RFA. Reports), September 30, 2025.
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Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules 37265
scope of five to 30 potential FDIC- in assets.201 As of September 30, 2025, both numbers appear to qualify as
supervised PPSIs could be small the NCUA supervised 4,331 FICUs; of ‘‘substantial.’’ But, again, it is important
entities. By adopting this conservative these, 2,553 (or 58.9 percent) qualified to remember small credit unions
assumption, the FDIC aims to provide a as small entities. Compared with typically have relatively simple
comprehensive estimate of the potential commercial banks, credit unions are operations with plain vanilla product/
economic impact on small entities. quite small. Indeed, the industry service offerings. The CUSOs serving
In the unlikely scenario that all, i.e., median asset size (again 2025:Q3) was these credit unions would be extremely
the upper-bound number of 30 entities, $63.63 million—roughly one-sixth of unlikely to become PPSIs even if the CIP
would be small, the estimated impact on the median asset size in the banking regulatory burden were zero dollars. So,
each small entity would be a de minimis industry. Put another way, 3,813 FICUs to arrive at an estimate of small FICUs
amount. Even if all 30 entities would (88.0 percent of all FICUs) would potentially facing an undue burden,
instead be significantly impacted by the qualify as small under the FDIC RFA recall the estimate for PPSIs
proposed rule, the FDIC does not threshold (fewer than $850 million). industrywide offered above—zero to 10.
consider 30 entities to be a substantial Predicting the number of PPSIs in the Now, assume (unrealistically) the actual
number of small entities. credit-union sector is difficult because: number is 10, that all held fewer than
(i) CUSOs or credit unions have never $100 million in assets, and all faced
In light of the foregoing, the FDIC
offered a product quite like stablecoin; marginal compliance expenses
certifies that the proposed rule would and (ii) as noted, the NCUA—with exceeding 5 percent of compensation
not have a significant economic impact extremely limited authority over CUSOs expense or 2.5 percent of non-interest
on a substantial number of small (as third-party vendors)—has little-to-no expense. Under these conservative
entities. Accordingly, an initial anecdotal or formal data to make a assumptions, only 0.4 percent of small
regulatory flexibility analysis is not forecast. That said, the National FICUs would face an undue burden. In
required. Association of Credit Union Service short, the relatively modest size and
The FDIC invites comments on all Organizations (NACUSO) reported in its simple operations of ‘‘small’’ FICUs—
aspects of the supporting information 2020 CUSO Market Report that credit both absolutely and compared with
provided in this RFA section. The FDIC unions holding between $100 and $500 commercial banks—suggest few would
is particularly interested in comments million in assets are by far the largest be interested in stablecoins even if there
on any significant effects on small block of CUSO customers. Moreover, the were no regulatory burden. Accordingly,
entities that the agency has not credit-union sector has historically been it is reasonable to conclude the CIP rule
identified. conservative in its approach to offering will not have a significant economic
5. NCUA Certification products/services with novel risk impact on a substantial number of small
dimensions. When such products/ FICUs.
As noted in the FDIC certification, services are offered, large credit unions
under the RFA an initial regulatory D. Unfunded Mandates Reform Act
have been in the forefront. In short,
analysis is not required if the qualitative and quantitative data suggest The UMRA requires that an agency
promulgating agency certifies the the number of PPSIs in the credit-union prepare a statement before promulgating
proposed rule (if enacted) would not sector should be well below that in the a rule that may result in expenditure by
have a ‘‘significant economic impact’’ banking industry. Specifically, the the state, local, and Tribal governments,
on a substantial number of ‘‘small NCUA expects the actual number to fall in the aggregate, or by the private sector,
entities.’’ The NCUA certifies the between zero and 10, with five being a of $193 million or more in any one year
economic burden of the CIP rule—both reasonable point estimate. Five ($100 million in 1995, adjusted for
in terms of likely expenses borne by represents 0.2 percent of the total inflation).203 Section 202 of UMRA also
individual small credit unions and the number of small FICUs. requires an agency to identify and
number of small credit unions facing As for the number of small FICUs consider a reasonable number of
significant expenses—falls short of the potentially facing a ‘‘significant’’ regulatory alternatives before
RFA materiality threshold. burden, applying the FBA materiality promulgating a rule.
Under the GENIUS Act, federally threshold of either 5 percent of annual As discussed above,204 FinCEN and
insured credit unions (FICUs) cannot compensation expense or 2.5 percent of the Agencies have not estimated the
become PPSIs. The credit-union total non-interest expense is number of potential future SQPSIs given
analogue for a bank subsidiary—at least problematic because small credit the inherently speculative nature of
for purposes of this act—is the credit unions: (1) tend to rely heavily on such an exercise at this time.
union service organization (CUSO).200 volunteers; 202 and (2) often enjoy free Consequently, FinCEN and the Agencies
Currently, the NCUA does not charter, office space provide provided by a
203 The U.S. Bureau of Economic Analysis reports
insure, or collect call-report type data sponsor. Under the FBA compensation the annual value of the gross domestic product
from CUSOs, so there is no formal threshold (5 percent), for example, 1,274 implicit price deflator for calendar year 1995 (the
definition of small for RFA purposes. small FICUs—49.9 percent of those year UMRA was enacted) as 66.939, and as 128.974
holding fewer than $100 million— for calendar year 2025 (the most recent available).
Following the FDIC, the NCUA relies on Thus, the inflation-adjusted estimate for $100
its traditional approach to RFA analysis would face a significant burden. million is 128.974 ÷ 66.939 × $100 million, or
by examining the impact of the CIP rule Similarly, under the FBA non-interest $192.7 million. See U.S. Bureau of Economic
on FICUs with fewer than $100 million expense threshold (2.5 percent), 1,226 Analysis, Table 1.1.9. Implicit Price Deflators for
would face an undue burden. At first, Gross Domestic Product, available at https://
apps.bea.gov/iTable/?reqid=19&step=3&isuri=1&
lotter on DSK8BHNXB4PROD with PROPOSALS2
200 A CUSO is an entity that provides various 1921=survey&1903=13#eyJhcHBpZCI6
201 Using this traditional approach implicitly
products/services to credit unions and their MTksInN0ZXBzIjpbMSwyLDMsM10s
members. The goals are to (i) enable credit unions assumes (for analytical purposes only) CUSOs are ImRhdGEiOltbIk5JUEFfVGFibGVfTGlzdCI
to enjoy economies of scale and (ii) expand the a formal part of the credit unions they support. The sIjEzIl0sWyJDYXRlZ29yaWVzIiwiU3VydmV5Il0sWy
range of product/service offerings for credit-union NCUA Board established the definition of ‘‘small’’ JGaXJzdF9ZZWFyI
members. These organizations are typically owned (fewer than $100 million in assets) via IRPS 80 FR iwiMTk5NSJdLFsiTGFzdF9ZZWFyIiwiMjAyNSJd
by one or more credit unions. Examples of CUSO 57512 in 2015. LFsiU2NhbGUiLCIwIl0sWyJTZXJpZXMiLCJBI
products/services include loan origination, 202 For example, the median number of paid full- l1dfQ==.
operational support, and IT services. time equivalent employees for a small FICU is five. 204 See supra sections VIII.A.2.ii.a.
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37266 Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules
are unable to assess the potential burden those persons wishing to comment on activities is expected to decrease to
to state, local, and Tribal governments the information collections. approximately ten hours per PPSI,
of the proposed CIP rule and are, at this irrespective of type, in each subsequent
1. Description of Affected Financial
time, not expecting any additional year. This activity would involve tasks
Institutions and OMB Control Numbers
expenditures to these parties as an such as reviewing the requirements of
incremental cost of the proposed rule. OMB Control Number(s): [1506– the rule, establishing and documenting
However, FinCEN and the Agencies’ XXXX]. the program, and updating the CIP when
expectation that this rulemaking will Description of Affected Entities: Only necessary.
not cause material changes in State those covered financial institutions
expenditures, in particular, should be defined in section 31 CFR ii. Obtaining and Verifying Customer
understood as relating only to the 1010.100(t)(11) (i.e., PPSIs) would be Identification Information
impact of this rulemaking and not to the affected. The proposed rule would require
impact of the GENIUS Act writ large. Estimated Number of Respondents: 50 PPSIs to collect and verify certain
The GENIUS Act envisions an active PPSIs. information from each customer.211
role for the states in the regulation of FinCEN estimates an average annual Because the proposal exempts existing
PPSIs as a complement to Federal population of approximately 50 PPSIs in primary market customers from
regulation. the first three years, comprised of information collection requirements, the
While the analyses above 205 and approximately 20 non-IDI subsidiary agencies estimate information collection
below,206 indicate that the proposed PPSIs and 30 IDI-subsidiary PPSIs.209 costs for primary market customers
rule is not expected to impose FinCEN expects these entities to each opening new accounts. FinCEN and the
incremental novel expenditures on the have an average of 1,000 customers, Agencies estimate this cost on a per-
private sector of $193 million or more, with an average of 650 new customers customer basis.
and hence that additional economic annually.210 FinCEN estimates a range of costs for
analysis pursuant to UMRA As this is a developing market, customer identification information
requirements is not strictly necessary, FinCEN and the Agencies acknowledge collection and verification—most of
FinCEN and the Agencies believe that significant uncertainty regarding the which would be from legal entities.212
the preceding assessment of impact, number of potential PPSIs. However, as FinCEN estimates that small issuers
generally, and consideration of policy discussed earlier, FinCEN and the would require an average of one hour to
alternatives, specifically, would satisfy Agencies estimate that IDI-subsidiary correspond with each new customer and
the UMRA’s analytical requirements. PPSIs would have reduced CIP-related collect the required information, while
FinCEN and the Agencies invite public expenses due to their position within a larger issuers would require only ten
comment on any additional factors that, parent’s existing CIP program. minutes (0.17 hours) per new customer,
if considered, would materially alter the 2. Estimated Annual Burden Hours owing to more volume and onboarding
conclusions of this assessment. automation. Thus, FinCEN uses an
As described in section VIII.A.4.ii.a, average of 35 minutes (0.58 hours) per
E. Paperwork Reduction Act each PPSI is expected to incur new customer for non-IDI subsidiary
The recordkeeping requirements in recordkeeping burdens associated with PPSIs. For PPSI entities affiliated with
the proposed rule, which qualify as the proposed CIP obligations. FinCEN insured depository institutions, FinCEN
‘‘collections of information’’ under the and the Agencies have identified five and the Agencies estimate more
PRA, will be submitted to OMB for main cost categories associated with the streamlined information collection
review in accordance with the PRA.207 various incremental recurring costs processes associated with the existing
Under the PRA, an agency may not expected to be incurred by PPSIs to CIP program of the parent. For this
conduct or sponsor, and a person is not comply with CIP requirements. These reason, FinCEN estimates an average
required to respond to, a collection of cost categories are: (1) establishing and time to correspond with each new
information unless it displays a valid maintaining a written CIP; (2) obtaining customer and collect the required
control number assigned by OMB.208 and verifying customer identification information ranging from ten minutes
Written comments and information, (3) recordkeeping; (4) for most banks to 20 minutes for some
recommendations for the proposed consulting government lists, and (5) smaller banks. FinCEN uses an average
information collection can be submitted customer notification. of 15 minutes (0.25 hours) per new
by visiting https://www.reginfo.gov/ i. Establishing and Maintaining a customer.
public/do/PRAMain. Find this Written CIP
particular document by selecting iii. Recordkeeping
‘‘Currently Under Review—Open for PPSIs subject to this rule would have The proposed rule would require
Public Comments’’ or by using the to establish a CIP in accordance with the certain records to be retained for a five-
search function. Comments are welcome proposed rule. FinCEN estimates the year period following the creation of the
and must be received by August 21, average cost for a PPSI to establish and record 213 and others to be retained for
2026. maintain a written CIP as described in five years following an account
In accordance with requirements of section VIII.A.4.ii.a.1 to be between closure.214 To allocate burden to these
the PRA, 44 U.S.C. 3506(c)(2)(A), and its approximately 20 to 30 hours per firm obligations, FinCEN PRA estimates
implementing regulations, 5 CFR part (with an average of 25 hours per firm) allow for non-labor, technology costs
1320, the following information in the first year for non-IDI subsidiary that include an annual $100 baseline
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concerning the collection of information PPSIs, and about ten to 15 hours per cost for each PPSI and a per-record cost
as it relates to the new CIP requirements firm (with an average of approximately of $0.10 associated with storing new
for covered PPSIs is presented to assist 12 hours per firm) in the first year for customer records in accordance with
IDI-subsidiary PPSIs. For both PPSI
205 See supra sections VIII.A through C. types, the average burden of these 211 See supra section V.B.2.
206 See infra section VIII.E. 212 See supra section VIII.A.2.ii.b.
207 See 44 U.S.C. 3506(c)(2). 209 See supra section VIII.A.2.ii.a. 213 See supra note 168.
208 See 44 U.S.C. 3507(a)(3). 210 See supra section VIII.A.2.ii.b. 214 See supra note 169.
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Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules 37267
similar estimates in prior requirement to account for the possible ongoing annual burden to review and
rulemakings.215 future issuance of such lists. update the notice if necessary.216
iv. Comparison With Government Lists v. Customer Notification vi. Summary of Annual Burden Hours
The proposed rule would require a The proposed rule would require a
PPSI’s CIP to include reasonable PPSI’s CIP to include procedures for Tables 7 and 8 present the estimated
procedures for determining whether a providing its customers with adequate average annual burden hours per
customer appears on any list of known notice that the issuer is requesting respondent and the aggregate average
or suspected terrorists or terrorist information to verify their identities. annual burden hours for all affected
organizations issued by any Federal Because the notice is a standardized PPSIs in year one and in subsequent
government agency and designated as disclosure included with all years, respectively.217 FinCEN estimates
such by Treasury in consultation with applications, FinCEN does not a three-year average annual burden of
the Federal payment stablecoin anticipate a per-customer burden, but 264 hours per PPSI and a three-year
regulators. While such a list has not yet rather a one-time upfront cost to add the average annual burden of 13,178 hours
been issued, a nominal one-hour burden notice to application materials. FinCEN for all 50 PPSIs.218
in the PRA section is assigned to this also assigns a nominal average one-hour
TABLE 7—YEAR-1 BURDEN HOUR ESTIMATES
Total
Hours per Number of Hours per Number of
Recordkeeping burden attributed to burden
response responses respondent respondents hours
Establishing and maintaining a written CIP (non-IDI subsidiary
PPSIs) .............................................................................................. 25 1 25 20 500
Establishing and maintaining a written CIP (IDI-subsidiary PPSIs) .... 12 1 12 30 360
Obtaining/verifying customer identification information (non-IDI sub-
sidiary PPSIs) ................................................................................... 0.58 650 379 20 7,583
Obtaining/verifying customer identification information (IDI-subsidiary
PPSIs) .............................................................................................. 0.25 650 162.5 30 4,875
Consulting government lists ................................................................. 1 1 1 50 50
Providing notice to customers ............................................................. 1 1 1 50 50
Total .............................................................................................. 50 13,418
TABLE 8—YEARS 2+ BURDEN HOUR ESTIMATES
Total
Hours per Number of Hours per Number of
Recordkeeping burden attributed to burden
response responses respondent respondents hours
Establishing and maintaining a written CIP ......................................... 10 1 10 50 500
Obtaining/verifying customer identification information (non-IDI sub-
sidiary PPSIs) ................................................................................... 0.58 650 379 20 7,583
Obtaining/verifying customer identification information (IDI-subsidiary
PPSIs) .............................................................................................. 0.25 650 163 30 4,875
Consulting government lists ................................................................. 1 1 1 50 50
Providing notice to customers ............................................................. 1 1 1 50 50
Total .............................................................................................. 50 13,058
3. Estimated Annual Total Costs respectively. FinCEN estimates an annual non-labor cost of $8,250 to
average annual labor cost of $32,835 per account for storage and technology
Tables 9 and 10 present the average PPSI and an aggregate annual labor cost costs. In total, FinCEN and the Agencies
annual cost per respondent and total of $1.64 million. FinCEN additionally estimate an average annual of $33,000
annual cost for all affected PPSIs for estimates an average annual non-labor per PPSI 219 and an aggregate annual
year one and years two and three, cost of $165 per PPSI and an aggregate cost of $1.65 million.
215 See, e.g., FinCEN, Agency Information recordkeeping burden is largely incurred when the of various (1) types (e.g., whether a PPSI is a
lotter on DSK8BHNXB4PROD with PROPOSALS2
Collection Activities; Proposed Renewal; Comment notification is initially drafted. subsidiary of an insured depository institution or
217 Hourly burden figures presented in Table 7
Request; Renewal Without Change on Information not) and (2) sizes, average values may not
Sharing Between Government Agencies and and Table 8 are rounded to the nearest hundredth meaningfully represent the economic burden that
Financial Institutions, 90 FR 47125 (Sept. 30, 2025). of an hour for presentation purposes. Total burden any single, particular PPSI may expect to incur.
216 FinCEN and the Agencies request comment on
figures are produced using unrounded figures for 219 FinCEN notes again, that due to heterogeneity
accuracy.
whether PPSIs would likely incur an annual 218 FinCEN and the Agencies note that because, across the PPSI population, average costs may not
recordkeeping burden associated with the proposed in its approach to calculating expected time meaningfully represent the economic burden that
customer notification requirement, or whether the burdens, different burden estimates apply to PPSIs any single, particular PPSI may expect to incur.
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37268 Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules
TABLE 9—TOTAL ESTIMATED COST IN YEAR 1
Total
Hours per Cost per
Recordkeeping burden attributed to burden Total cost
respondent respondent hours
Establishing and maintaining a written CIP (non-IDI subsidiary PPSIs) ............................. 25 $3,115 500 $62,290
Establishing and maintaining a written CIP (IDI-subsidiary PPSIs) .................................... 12 1,495 360 44,849
Obtaining/verifying customer identification information (non-IDI subsidiary PPSIs) ........... 379 47,237 7,583 944,732
Obtaining/verifying customer identification information (IDI-subsidiary PPSIs) .................. 163 20,244 4,875 607,328
Recordkeeping (Technology) ............................................................................................... 165 8,250
Consulting government lists ................................................................................................ 1 125 50 6,229
Providing notice to customers ............................................................................................. 1 125 50 6,229
Total .............................................................................................................................. 1,679,906
TABLE 10—TOTAL ESTIMATED ANNUAL COST IN YEARS 2+
Total
Hours per Cost per
Recordkeeping burden attributed to burden Total cost
respondent respondent hours
Establishing and maintaining a written CIP ......................................................................... 10 $1,246 500 $62,290
Obtaining/verifying customer identification information (non-IDI subsidiary PPSIs) ........... 379 47,237 7,583 944,732
Obtaining/verifying customer identification information by (IDI-subsidiary PPSIs) ............. 163 20,244 4,875 607,328
Recordkeeping (Technology) ............................................................................................... 165 8,250
Consulting government lists ................................................................................................ 1 125 50 6,229
Providing notice to customers ............................................................................................. 1 125 50 6,229
Total .............................................................................................................................. 1,635,057
4. Aggregate Burden and Cost Estimates (RCDRIA), in determining the effective proposed rule easier to understand. For
date and administrative compliance example:
Estimated Number of Respondents: 50
PPSIs.
requirements for new regulations that • Have the agencies organized the
impose additional reporting, disclosure, material to suit your needs? If not, how
Estimated Aggregate Three-Year
or other requirements on IDIs, each could the proposed rule be more clearly
Average Annual Recordkeeping Burden:
Federal banking agency must consider, stated?
Approximately 13,178 hours.
Estimated Aggregate Three-Year
consistent with principles of safety and • Are the requirements in the
soundness and the public interest, any proposed rule clearly stated? If not, how
Average Annual Recordkeeping Cost: administrative burdens that such
Approximately $1,650,007. could the proposed rule be more clearly
regulations would place on affected stated?
5. General Request for Comments Under depository institutions, including small • Does the proposed rule contain
the Paperwork Reduction Act depository institutions, and customers language or jargon that is not clear? If
of depository institutions, as well as the so, which language requires
FinCEN and the Agencies invite benefits of such regulations.220 In
comments on: (1) whether the collection clarification?
addition, section 302(b) of the RCDRIA • Would a different format (grouping
of information is necessary for the requires new regulations and
proper performance of the mission of and order of sections, use of headings,
amendments to regulations that impose paragraphing) make the proposed rule
FinCEN, including whether the additional reporting, disclosures, or
information would have practical easier to understand? If so, what
other new requirements on insured changes to the format would make the
utility; (2) the accuracy of FinCEN’s depository institutions generally to take
estimate of the burden of the proposed proposed rule easier to understand?
effect on the first day of a calendar
collection of information; (3) ways to • What else could the agencies do to
quarter that begins on or after the date
enhance the quality, utility, and clarity make the proposed rule easier to
on which the regulations are published
of the information required to be understand?
in final form.221 The Agencies invite
maintained; (4) ways to minimize the comments to further inform their H. Providing Accountability Through
burden of the collection of information, consideration of the RCDRIA. Transparency Act of 2023
including through the use of automated
collection techniques or other forms of G. Plain Language The Providing Accountability
information technology; and (5) Section 722 of the Gramm-Leach- Through Transparency Act of 2023
estimates of capital or start-up costs and Bliley Act 222 requires the Federal requires that a notice of proposed
costs of operation, maintenance, and banking agencies to use plain language rulemaking include the internet address
of a summary of not more than 100
lotter on DSK8BHNXB4PROD with PROPOSALS2
purchase of services required to report in all proposed and final rulemakings
the information. published in the Federal Register after words in length of a proposed rule, in
January 1, 2000. The agencies invite plain language, that shall be posted on
F. Riegle Community Development and the internet website under section
Regulatory Improvement Act your comments on how to make this
206(d) of the E-Government Act of
Pursuant to section 302(a) of the 220 12 U.S.C. 4802(a). 2002.223
Riegle Community Development and 221 12 U.S.C. 4802(b).
Regulatory Improvement Act of 1994 222 12 U.S.C. 4809. 223 5 U.S.C. 553(b)(4).
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Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules 37269
The proposal and the required reflection of the cost faced by issuers of entities that the agency has not
summary can be found at products that may be considered identified.
www.regulations.gov by searching for payment stablecoins? If not, are there 14. The economic expectation that the
Docket IDs FINCEN–2026–0101, OCC– specific sources of empirical evidence proposed rule may have a significant
2026–0331 or NCUA–2026–0793 or or data that would suggest these burden economic impact on a substantial
https://www.fdic.gov/federal-register- estimates should be revised? Are there number of certain types of potentially
publications. any additional cost categories related to affected small entities is sensitive to key
establishing and maintaining a CIP that assumptions about how potentially
I. Additional Requests for Comment
FinCEN and the Agencies have failed to affected financial institutions would
1. Are FinCEN and the Agencies’ consider? Please provide data, studies, respond to the proposed requirements.
baseline estimates of the number of or anecdotal evidence that would FinCEN and the Agencies request
market participants accurate? Are there support any suggested revisions. comment on whether it would instead
specific sources of data that would 8. What types and share of PPSIs be more reasonable to certify that the
suggest any of these population would likely already have CIPs proposed rule would not have a
estimates should be revised? Please established and would therefore not significant economic impact on a
provide data, studies, or anecdotal incur the full costs associated with
substantial number of small entities.
evidence that would support any establishing and maintaining a CIP? Are
suggested alternatives. there certain CIPs or customer 15. FinCEN and the Agencies do not
2. Are there other distinct, identifiable identification practices implemented by anticipate that the proposed rule would
subpopulations of the general public stablecoin issuers that this analysis result in novel incremental aggregate
that could reasonably be directly should take into account? Please expenditures by State, local, or Tribal
affected by the proposed rule and provide data, studies, or reports that governments, or by the private sector of
should have been considered in the would enhance FinCEN and the $193 million or more in any one year.
RIA? Please provide data, studies, or Agencies’ ability to identify this Is this assumption reasonable? If not,
reports that would enhance FinCEN and population. what studies, data, or anecdotal
the Agencies’ ability to identify and 9. Is it reasonable to assume that evidence should be taken into
quantify such effects. PPSIs would already have measures in consideration that would update this
3. FinCEN and the Agencies assume place to form a reasonable belief that expectation?
that a number of depository institutions they know the true identities of their 16. Would PPSIs incur ongoing
would have affiliates or subsidiaries that existing customers and therefore would recordkeeping burdens associated with
seek PPSI status and that other PPSIs not need to obtain and verify customer the proposed customer notification
would not be subsidiaries of insured identification information for any of requirement? Or is the recordkeeping
depository institutions. How likely are their existing primary market customers burden largely incurred when the
issuers or potential issuers to seek PPSI in the first year once the rule would notification is initially drafted? If it is an
status as a subsidiary of an insured become effective? If not, what share of ongoing burden, what is the average
depository institution versus seeking PPSIs would need to obtain and verify amount of time spent on the
PPSI status not as a subsidiary of an customer identification for all or a recordkeeping activity per year?
insured depository institution? portion of their existing customers? Are
4. FinCEN and the Agencies made there specific sources of empirical J. NCUA Analysis on Executive Order
certain assumptions, based on data, evidence or data that would suggest this 13132 on Federalism
about the number of primary customers assumption should be revised? Please Executive Order 13132 encourages
that a typical PPSI would have. How provide data, studies, or anecdotal certain regulatory agencies to consider
many primary market customers does a evidence that would support the the impact of their actions on state and
typical issuer of payment stablecoin- suggested alternative assumption. local interests. The NCUA, an agency as
type products interact with? What costs 10. FinCEN and the Agencies request defined in 44 U.S.C. 3502(5), complies
do issuers face in collecting customer comment on the alternative policy with the executive order to adhere to
information from these entities? How options presented in section VIII.A.5 fundamental federalism principles. This
many are these customers are new to the and their economic effect. proposed rule would apply to PPSIs.
issuer on an annual basis? 11. FinCEN utilized a threshold of
This scope is set by statute. The NCUA
5. Is it likely that any of the 14,575 less than $200 million in total reserve
works cooperatively with state
financial institutions listed in Table 2 assets to define a small payment
regulatory agencies on all supervisory
would be relied upon by PPSIs for some stablecoin issuer. How appropriate is
matters, including AML/CFT matters,
aspect of their CIP compliance? Please this threshold? Similarly, is five percent
and will continue to do so. The NCUA
provide data, studies, reports, or of total reserve assets a good estimation
expects that any effect on states or on
anecdotal evidence that would enhance of these firms’ revenue?
12. The RIA in this NPRM does not the distribution of power and
FinCEN and the Agencies’ ability to
include a forecasted population of responsibilities among the various
identify and quantify the effects of such
potential future SQPSIs due to levels of government will be minor. The
reliance.
6. To what extent should the limitations in data availability. Please NCUA welcomes comments on ways to
economic impact on state regulatory provide data, studies, or anecdotal eliminate, or at least minimize, any
agencies be considered in the RIA? evidence that would enable analysis of potential impact in this area.
lotter on DSK8BHNXB4PROD with PROPOSALS2
Please provide data, studies, or reports the potential effects of the proposed K. NCUA Assessment of Federal
that would support the identification requirements on SQPSIs, generally, and Regulations and Policies on Families
enhance FinCEN’s ability to identify small SQPSIs in particular.
and quantify such effects. 13. The FDIC, Board, NCUA, and OCC The NCUA has determined that this
7. Is FinCEN and the Agencies’ invite comments on all aspects of the proposed rule would not affect family
analysis of the average costs for each supporting information provided in well-being within the meaning of
component of the CIP as outlined in sections VIII.C.2–5, particularly related section 654 of the Treasury and General
section VIII.A.4.ii.a reasonable to any significant effects on small Government Appropriations Act,
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37270 Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules
1999.224 The proposed rule relates to (ii) An account that the permitted (2) Digital asset service provider does
PPSIs, and any effect on family well- payment stablecoin issuer acquires not include:
being is expected to be indirect. through an acquisition, merger, (i) A distributed ledger protocol,
purchase of assets, or assumption of (ii) Developing, operating, or engaging
List of Subjects in 31 CFR Part 1033 in the business of developing
liabilities from a financial institution
Administrative practice and regulated by a Federal functional distributed ledger protocols or self-
procedure, Banks, banking, Business regulator or a bank regulated by a State custodial software interfaces;
and industry, Electronic filing, Foreign bank regulator; (iii) An immutable and self-custodial
persons, Investigations, Law (iii) An account opened for the software interface;
enforcement, Reporting and purpose of participating in an employee (iv) Developing, operating, or
recordkeeping requirements, Terrorism. benefit plan established under the engaging in the business of validating
For the reason set forth in the Employee Retirement Income Security transactions or operating a distributed
preamble, FinCEN and the OCC, Board, Act of 1974; or ledger; or
FDIC, and NCUA propose that FinCEN (iv) Ownership or control of a (v) Participating in a liquidity pool or
amend 31 CFR part 1033, as proposed permitted payment stablecoin issuer’s other similar mechanism for the
to be added at 91 FR 18582 (April 10, payment stablecoins alone, without provisioning of liquidity for peer-to-peer
2026), as follows: other indicators of a formal relationship. transactions.
(b) Customer. For the purposes of (3) For purposes of this paragraph (c),
PART 1033—RULES FOR PERMITTED § 1033.220: the term distributed ledger protocol
PAYMENT STABLECOIN ISSUERS (1) Customer means: means a publicly available and
(i) A person that opens a new account; accessible executable software deployed
■ 1. The authority citation for part 1033 and to a distributed ledger, including smart
continues to read as follows: (ii) An individual who opens a new contracts or networks of smart contracts.
Authority: 12 U.S.C. 1829b, 1951–1959, account for: ■ 3. Add § 1033.220 to read as follows:
and 5901–5916; 31 U.S.C. 5311–5314 and (A) An individual who lacks legal
5316–5336; title III, sec. 314, Pub. L. 107–56, capacity, such as a minor; or § 1033.220 Customer identification
115 Stat. 307; sec. 701, Pub. L. 114–74, 129 programs for permitted payment stablecoin
(B) An entity that is not a legal issuers.
Stat. 599. person, such as a civic club.
(2) Customer does not include: (a) Customer identification program:
■ 2. In § 1033.100, add paragraphs (a)
(i) A financial institution regulated by minimum requirements—(1) In general.
through (c) to read as follows:
a Federal functional regulator or a bank A permitted payment stablecoin issuer
§ 1033.100 Definitions. regulated by a State bank regulator; must establish and maintain a written
* * * * * (ii) A person described in 31 CFR Customer Identification Program (CIP)
(a) Account. For the purposes of 1020.315(b)(2) through (4); appropriate for its size and business
§ 1033.220: (iii) A person that has an existing that, at a minimum, includes each of the
(1) Account means a formal account with the permitted payment requirements of paragraphs (a)(1)
relationship between a customer and a stablecoin issuer, provided the through (5) of this section. The CIP must
permitted payment stablecoin issuer permitted payment stablecoin issuer has be a part of the permitted payment
established to provide or engage in a reasonable belief that it knows the true stablecoin issuer’s anti-money
services, dealings, or other financial identity of the person; or laundering (AML)/countering the
transactions including but not limited (iv) A person acquiring or redeeming financing of terrorism (CFT) program.
to— a payment stablecoin from a means (2) Identity verification procedures.
(i) Issuing or redeeming a payment other than directly from or directly to The CIP must include risk-based
stablecoin; the permitted payment stablecoin procedures for verifying the identity of
(ii) Managing related reserves, issuer. each customer to the extent reasonable
including purchasing, selling, and (c) Digital asset service provider. For and practicable. The procedures must
holding reserve assets or providing the purposes of § 1033.220: enable the permitted payment
custodial services for reserve assets; (1) Digital asset service provider stablecoin issuer to form a reasonable
(iii) Providing custodial or means an individual, partnership, belief that it knows the true identity of
safekeeping services for payment company, corporation, association, each customer. The procedures must be
stablecoins, required reserves, or private trust, estate, cooperative organization, or based on the permitted payment
keys of payment stablecoins; other business entity, incorporated or stablecoin issuer’s assessment of the
(iv) Other activities that directly unincorporated that, for compensation relevant risks, including those presented
support activities in paragraphs (a)(1)(i) or profit, engages in business in the by the various types of accounts
through (iii) of this section; or United States (including on behalf of maintained by the permitted payment
(v) Providing services of a digital asset customers or users in the United States) stablecoin issuer, the various methods
service provider. of: of opening accounts provided by the
(2) Account does not include: (i) Exchanging digital assets for permitted payment stablecoin issuer,
(i) A product or service where a monetary value, meaning a national the various types of identifying
formal relationship is not established currency or deposit denominated in a information available and the permitted
with a person, such as payment national currency; payment stablecoin issuer’s size,
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stablecoin activity that does not directly (ii) Exchanging digital assets for other location, and customer base. At a
involve the permitted payment digital assets; minimum, these procedures must
stablecoin issuer as a party to the (iii) Transferring digital assets to a contain the elements described in this
transaction other than via a smart third party; paragraph (a)(2).
contract; (iv) Acting as a digital asset custodian; (i) Customer information required—
or (A) In general. The CIP must contain
224 Public Law 105–277, section 654, 112 Stat. (v) Participating in financial services procedures for opening an account that
2681, 2681–528 (1998). relating to digital asset issuance. specify the identifying information that
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Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules 37271
will be obtained with respect to each procedures must describe when the risk assessment of a new account
customer. Except as permitted by permitted payment stablecoin issuer opened by a customer that is not an
paragraph (a)(2)(i)(B) of this section, the will use documents, non-documentary individual, the permitted payment
permitted payment stablecoin issuer methods, or a combination of both stablecoin issuer will obtain information
must obtain, at a minimum, the methods, as described in this paragraph about individuals with authority or
following information from the (a)(2)(ii). control over such account in order to
customer prior to opening an account: (A) Verification through documents. verify the customer’s identity. This
(1) Name; For a permitted payment stablecoin verification method applies only when
(2) Date of birth, for an individual; or issuer relying on documents, the CIP the permitted payment stablecoin issuer
date of formation, for a person that is must contain procedures that set forth cannot verify the true identity of a
not an individual; the documents the permitted payment customer that is not an individual using
(3) Address, which shall be: stablecoin issuer will use. These the verification methods described in
(i) For an individual, a residential or documents may include: paragraphs (a)(2)(ii)(A) and (B) of this
business street address; (1) For an individual, an unexpired section.
(ii) For an individual who does not government-issued identification (iii) Lack of verification. The CIP must
have a residential or business street evidencing nationality or residence and include procedures for responding to
address, an Army Post Office (APO) or bearing a photograph or similar circumstances in which the permitted
Fleet Post Office (FPO) box number, of safeguard, such as a driver’s license or payment stablecoin issuer cannot form a
the residential or business street address passport; and reasonable belief that it knows the true
of a next of kin or of another contact (2) For a person other than an identity of a customer. These
individual; or individual (such as a corporation, procedures should describe:
(iii) For a person other than an partnership, or trust), documents and (A) When