NPRM: Permitted Payment Stablecoin Issuer Customer Identification Program (91 FR 37234) (Part 1 of 4)
Document text
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.
37234 Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules
DEPARTMENT OF THE TREASURY you do not want publicly disclosed. All ‘‘Search.’’ Click on the ‘‘Documents’’ tab
comments are public records; they are and then the document’s title. After
Financial Crimes Enforcement Network publicly displayed exactly as received, clicking the document’s title, click the
and will not be deleted, modified, or ‘‘Document Comments’’ tab. Comments
31 CFR Part 1033 redacted. Comments may be submitted can be viewed and filtered by clicking
anonymously. on the ‘‘Sort By’’ drop-down on the right
RIN 1506–AB74 Follow the search instructions on side of the screen or the ‘‘Refine
Permitted Payment Stablecoin Issuer https://www.regulations.gov to view Results’’ options on the left side of the
Customer Identification Program public comments. screen. Supporting materials can be
OCC: Commenters are encouraged to viewed by clicking on the ‘‘Documents’’
AGENCY: Financial Crimes Enforcement submit comments through the Federal tab. Click on the ‘‘Sort By’’ drop-down
Network and Office of the Comptroller eRulemaking Portal. Please use the title on the right side of the screen or the
of the Currency, Treasury; Board of ‘‘Permitted Payment Stablecoin Issuer ‘‘Refine Documents Results’’ options on
Governors of the Federal Reserve Customer Identification Program’’ and the left side of the screen checking the
System; Federal Deposit Insurance ‘‘RIN 1557–AF53’’ to facilitate the ‘‘Supporting & Related Material’’
Corporation; National Credit Union organization and distribution of the checkbox. For assistance with the
Administration. comments. You may submit comments regulations.gov site, please call 1–866–
ACTION: Joint proposed rule.
by any of the following methods: 498–2945 (toll free) Monday–Friday, 9
• Federal eRulemaking Portal— a.m.–5 p.m. ET, or email
SUMMARY: The Financial Crimes Regulations.gov: Go to https:// [email protected].
Enforcement Network (FinCEN), regulations.gov. Enter Docket ID OCC– The docket may be viewed after the
together with the Office of the 2026–0331 in the Search Box and click close of the comment period in the same
Comptroller of the Currency (OCC), the ‘‘Search.’’ Public comments can be manner as during the comment period.
Board of Governors of the Federal submitted via the ‘‘Comment’’ box Board: You may submit comments,
Reserve System (Board), the Federal below the displayed document identified by Docket No. R–1885 and
Deposit Insurance Corporation (FDIC), information or by clicking on the RIN 7100–AH18, by any of the following
and the National Credit Union document title and then clicking the methods:
Administration (NCUA) are jointly ‘‘Comment’’ box on the top-left side of • Agency Website: https://
issuing this proposed rule to implement the screen. For help with submitting www.federalreserve.gov. Follow the
certain provisions of the Guiding and effective comments please click on instructions for submitting comments at
Establishing National and Innovation for ‘‘Commenter’s Checklist.’’ For https://www.federalreserve.gov/
U.S. Stablecoins Act (GENIUS Act). assistance with the regulations.gov site, generalinfo/foia/ProposedRegs.cfm.
Specifically, this rulemaking please call 1–866–498–2945 (toll free) • Email: regs.comments@
implements the GENIUS Act’s directives Monday–Friday, 9 a.m.–5 p.m. ET, or federalreserve.gov. Include docket and
to treat permitted payment stablecoin email [email protected]. RIN numbers in the subject line of the
issuers as financial institutions under • Mail: Chief Counsel’s Office, message.
the Bank Secrecy Act and to require Attention: Comment Processing, Office • Fax: (202) 452–3819 or (202) 452–
issuers to maintain an effective of the Comptroller of the Currency, 400 3102.
7th Street SW, Suite 1E–216, • Mail: Benjamin W. McDonough,
customer identification program.
Washington, DC 20219. Secretary, Board of Governors of the
DATES: Comments must be received by
• Hand Delivery/Courier: 400 7th Federal Reserve System, 20th Street and
August 21, 2026. Street SW, Suite 1E–216, Washington, Constitution Avenue NW, Washington,
ADDRESSES: Comments should be DC 20219. DC 20551.
directed to: Instructions: You must include • Instructions: All public comments
FinCEN: Comments must be ‘‘OCC’’ as the agency name and Docket are available from the Board’s website at
submitted in one of the following two ID OCC–2026–0331 in your comment. In https://www.federalreserve.gov/
ways (please choose only one of the general, the OCC will enter all generalinfo/foia/ProposedRegs.cfm as
ways listed): comments received into the docket and submitted. Accordingly, comments will
• Electronically at https:// publish the comments on the not be edited to remove any identifying
www.regulations.gov. Follow the regulations.gov website without change, or contact information. Public
‘‘Submit a comment’’ instructions under including any business or personal comments may also be viewed
Docket FINCEN–2026–0101. If you are information provided such as name and electronically or on paper in Room M–
reading this document on address information, email addresses, or 4365A, 2001 C Street NW, Washington,
federalregister.gov, you may use the phone numbers. Comments received, DC 20551, between 9 a.m. and 5 p.m.
green ‘‘SUBMIT A PUBLIC COMMENT’’ including attachments and other during Federal business weekdays. For
button beneath this rulemaking’s title to supporting materials, are part of the security reasons, the Board requires that
submit a comment to the regulations.gov public record and subject to public visitors make an appointment to inspect
docket. disclosure. Do not include any comments. You may do so by calling
• You may mail written comments to information in your comment or (202) 452–3684. Upon arrival, visitors
the following address: Regulatory and supporting materials that you consider will be required to present valid
Strategic Affairs Division, Financial confidential or inappropriate for public government-issued photo identification
lotter on DSK8BHNXB4PROD with PROPOSALS2
Crimes Enforcement Network, P.O. Box disclosure. and to submit to security screening in
39, Vienna, VA 22183. Mailed You may review comments and other order to inspect and photocopy
comments must be received by the close related materials that pertain to this comments. For users of TTY–TRS,
of the comment period. action by the following method: please call 711 from any telephone,
Do not include any personally • Viewing Comments Electronically— anywhere in the United States.
identifiable information (such as name, Regulations.gov: Go to https:// FDIC: You may submit comments,
address, or other contact information) or regulations.gov. Enter Docket ID OCC– identified by RIN 3064–AG28, by any of
confidential business information that 2026–0331 in the Search Box and click the following methods:
VerDate Sep<11>2014 21:08 Jun 18, 2026 Jkt 268001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 E:\FR\FM\22JNP2.SGM 22JNP2
Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules 37235
• FDIC Website: https:// technical reasons. The NCUA will not Senior Staff Attorney, Office of General
www.fdic.gov/federal-register- edit or remove any identifying or Counsel, (703) 518–6540, gbose@
publications. Follow instructions for contact information from the public ncua.gov.
submitting comments on the agency comments submitted. If you are unable SUPPLEMENTARY INFORMATION:
website. to access public comments on the
• Email: [email protected]. Include internet, you may contact the NCUA for I. Introduction
RIN 3064–AG28 in the subject line of alternative access by calling (703) 518– This proposal implements the
the message. 6540 or emailing [email protected]. GENIUS Act’s directives to treat
• Mail: Jennifer M. Jones, Deputy FOR FURTHER INFORMATION CONTACT: permitted payment stablecoin issuers
Executive Secretary, Attention: FinCEN: The FinCEN Regulatory (PPSIs) as financial institutions for
Comments—RIN 3064–AG28, Federal Support Section by submitting an purposes of the Bank Secrecy Act (BSA)
Deposit Insurance Corporation, 550 17th inquiry at www.fincen.gov/contact. and to require such issuers to maintain
Street NW, Washington, DC 20429. OCC: Kenneth Kohrs, BSA/AML Lead an ‘‘effective customer identification
• Hand Delivery to FDIC: Comments program, including identification and
Expert, Office of the Chief National
may be hand-delivered to the guard verification of account holders.’’ 1 This
Bank Examiner; Jina Cheon, Assistant
station at the rear of the 550 17th Street notice of proposed rulemaking (NPRM)
Director, Melissa Lisenbee, Counsel, or
NW building (located on F Street) on is being issued jointly by FinCEN, along
Henry Barkhausen, Counsel, Bank
business days between 7 a.m. and 5 p.m. with the OCC, Board, FDIC, and NCUA
• Public Inspection: Comments Advisory Group, Chief Counsel’s Office,
(202) 649–5490, Office of the (each an ‘‘Agency’’ and collectively ‘‘the
received, including any personal Agencies’’) as applied to the PPSIs that
information provided, may be posted Comptroller of the Currency, 400 7th
Street SW, Washington, DC 20219. If each Agency supervises.2 The proposal
without change to https://www.fdic.gov/ would also apply to PPSIs that opt for
federal-register-publications. you are deaf, hard of hearing, or have a
speech disability, please dial 7–1–1 to state supervision under the GENIUS
Commenters should submit only Act.3
information that the commenter wishes access telecommunications relay
services. Separately, FinCEN issued a
to make available publicly. The FDIC rulemaking proposing changes to its
may review, redact, or refrain from Board: Division of Supervision and
Regulation, Lara Lylozian, Deputy existing regulations to effectuate the
posting all or any portion of any GENIUS Act’s direction to apply BSA
comment that it may deem to be Associate Director, (202) 815–9088, Lee
Davis, Lead BSA/AML Policy Analyst, obligations to PPSIs. These changes
inappropriate for publication, such as include creation of a new part in
irrelevant or obscene material. The FDIC (202) 740–8219, [email protected],
Legal Division, Jason Gonzalez, Deputy chapter X applicable to PPSIs, proposed
may post only a single representative part 1033, into which this proposed rule
example of identical or substantially Associate General Counsel, (202) 452–
3275, [email protected], Bernard would be incorporated.4
identical comments, and in such cases
will generally identify the number of Kim, Special Counsel, (202) 452–3083, II. Background and Authority
identical or substantially identical [email protected]. The GENIUS Act provides a
comments represented by the posted FDIC: Patricia Colohan, Deputy comprehensive framework for the
example. All comments that have been Director, (202) 898–7283, PColohan@ regulation of payment stablecoins.5 The
redacted, as well as those that have not fdic.gov, Division of Risk Management GENIUS Act requires that a PPSI ‘‘be
been posted, that contain comments on Supervision; Chase Lubbock, Associate treated as a financial institution for
the merits of the proposed rule will be Director, (703) 254–0802, clubbock@ purposes of the Bank Secrecy Act, and
retained in the public comment file and fdic.gov, Division of Risk Management
will be considered as required under all Supervision; Christy Cornell-Pape, 1 See 12 U.S.C. 5903(a)(5)(A)(v); see also 31 U.S.C.
applicable laws. All comments may be Acting Chief, Financial Crimes, (415) 5318(l).
accessible under the Freedom of 808–8090, [email protected], 2 The GENIUS Act outlines the reserve, capital,
Division of Risk Management liquidity, and risk management requirements for
Information Act. PPSIs and tasks implementing those requirements
NCUA: You may submit comments, Supervision; Deborah Tobolowsky, to the OCC, Board, FDIC, NCUA, and, as applicable,
identified by RIN 3133–AG09, by any of Counsel, (571) 309–2415, dtobolowsky@ any State payment stablecoin regulators. See 12
the following methods (please send fdic.gov, Legal Division; Chantal U.S.C. 5903(a)(4). The OCC, Board, FDIC, and
Hernandez, Counsel, (202) 898–7388, NCUA are tasked with establishing a process and
comments by one method only): framework for the licensing, regulation,
• Federal eRulemaking Portal: [email protected], Legal Division; examination, and supervision of PPSIs under their
https://www.regulations.gov. The docket Thomas Krepp, Senior Attorney, (678) respective purviews. See 12 U.S.C. 5901(25)
916–2265, [email protected], Legal (defining ‘‘primary Federal payment stablecoin
number for this proposed rule is NCUA– regulator’’ and outlining the Agencies’ respective
2026–0793. Follow the instructions for Division; Lea Pfeifer, Senior Attorney, jurisdictions for PPSIs).
submitting comments. A plain language (972) 761–8244, [email protected], Legal 3 See 12 U.S.C. 5903(c) (outlining option for state-
summary of the proposed rule is also Division; Maryann Bullion Mitchell, level regulatory regime for PPSIs with a
available on the docket website. Senior Attorney, (571) 858–8239, consolidated total outstanding issuance of not more
than $10 billion), 5906 (outlining supervision by
• Mail: Address to Melane Conyers- [email protected], Legal
State payment stablecoin regulators), 5901(30)
Ausbrooks, Secretary of the Board, Division; Nicholas Kazmerski, Counsel, (defining ‘‘State payment stablecoin regulator’’).
National Credit Union Administration, (571) 309–3136, [email protected], 4 Office of Foreign Assets Control (OFAC) and
1775 Duke Street, Alexandria, Virginia Legal Division. FinCEN, Permitted Payment Stablecoin Issuer Anti-
Money Laundering/Countering the Financing of
lotter on DSK8BHNXB4PROD with PROPOSALS2
22314–3428. NCUA: Michael Dondarski, Associate
Terrorism Program and Sanctions Compliance
• Hand Delivery/Courier: Same as Director, Office of Examination & Program Requirements, 91 FR 18582 (Apr. 10, 2026)
mailing address. Insurance, (703) 772- 4751, [hereinafter PPSI AML/CFT NPRM]. The PPSI
• Public inspection: You may view all [email protected]; Janell Portare, AML/CFT NPRM was issued jointly by FinCEN
public comments on the Federal Director, Fraud and Anti-Money with OFAC because it also proposes
implementation of the GENIUS Act’s sanction
eRulemaking Portal at https:// Laundering Division, Office of compliance program obligation.
www.regulations.gov, as submitted, Examination & Insurance, (703) 548– 5 GENIUS Act, Public Law 119–27, 139 Stat. 419
except for those we cannot post for 2752, [email protected]; Gira Bose, (2025) (codified at 12 U.S.C. 5901–5916).
VerDate Sep<11>2014 21:08 Jun 18, 2026 Jkt 268001 PO 00000 Frm 00003 Fmt 4701 Sfmt 4702 E:\FR\FM\22JNP2.SGM 22JNP2
37236 Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules
as such, shall be subject to all Federal terrorists or terrorist organizations a type of money services business
laws applicable to a financial institution provided to the financial institution by (MSB).19
located in the United States relating to any government agency.11 In prescribing The GENIUS Act directs the Secretary
economic sanctions, prevention of regulations related to these minimum of the Treasury to issue regulations,
money laundering, customer standards, the BSA directs the Secretary tailored to the size and complexity of
identification, and due diligence.’’ 6 In of the Treasury to ‘‘take into the PPSI, to implement the GENIUS
addition to this clear, general directive, consideration the various types of Act’s treatment of PPSIs as financial
the GENIUS Act specifies that a PPSI’s accounts maintained by various types of institutions for purposes of the BSA,
obligations include ‘‘maintenance of an financial institutions, the various including the requirement that PPSIs
effective customer identification methods of opening accounts, and the maintain effective customer
program, including identification and various types of identifying information identification programs.20 The GENIUS
verification of account holders with the available.’’ 12 For financial institutions Act also directs the Secretary of the
permitted payment stablecoin issuer.’’ 7 engaging in financial activity described Treasury and each primary Federal
The Bank Secrecy Act, or ‘‘BSA,’’ is in section 4(k) of the Bank Holding payment stablecoin regulator—the OCC,
the common name for a collection of Company Act of 1956, such regulations Board, FDIC, and NCUA—to issue
statutory authorities designed to, among must be jointly prescribed by the regulations through appropriate notice
other things, safeguard the national Secretary of the Treasury and the and comment rulemaking and to
security of the United States by appropriate Federal functional coordinate, as appropriate, to carry out
combating money laundering, the regulator.13 the Act.21 FinCEN and the Agencies are
financing of terrorism, and other illicit issuing a single, joint rule, ensuring
finance activity.8 The Secretary of the FinCEN, jointly with the appropriate consistent and uniform application of
Treasury has delegated the authority to Federal functional regulators, has issued CIP requirements to all PPSIs subject to
implement, administer, and enforce the implementing regulations imposing CIP each Agency’s jurisdiction.22
BSA and its associated regulations to obligations on various types of financial
institutions under the BSA, including III. GENIUS Act Implementation
the Director of FinCEN.9 The BSA
requires the Secretary of the Treasury to banks,14 brokers or dealers in Treasury issued an advance notice of
prescribe ‘‘minimum standards’’ for securities,15 mutual funds,16 and futures proposed rulemaking (ANPRM) in
financial institutions regarding ‘‘the commission merchants and introducing September 2025 seeking public
identity of the customer that shall apply brokers.17 In contrast, money comment on potential Treasury
in connection with the opening of an transmitters do not have a CIP regulations implementing the GENIUS
account,’’ commonly referred to as obligation, but they are required to, for Act, including those imposing BSA,
customer identification programs certain activity, verify an individual’s anti-money laundering, and sanctions
(CIPs).10 Under the BSA, these identity.18 Stablecoin issuers are compliance program obligations.23 In
minimum standards the Secretary of the presently subject to BSA obligations as
19 See 31 U.S.C. 5312(a)(2)(R) (defining as a
Treasury prescribes must include financial institutions and, more
‘‘financial institution,’’ in part, a ‘‘person who
reasonable procedures for: (1) verifying specifically, as money transmitters engages as a business in the transmission of
the identity of any person seeking to under FinCEN’s regulations, which are currency, funds, or value that substitutes for
open an account to the extent currency’’); see also 31 U.S.C. 5312(a)(2)(J) (defining
reasonable and practicable; (2) 11 31 U.S.C. 5318(l)(2). as a ‘‘financial institution’’ a ‘‘business engaged in
the exchange of currency, funds, or value that
maintaining records of the information 12 31 U.S.C. 5318(l)(3).
substitutes for currency or funds’’); 31 CFR
used to verify a person’s identity, 13 31 U.S.C. 5318(l)(4) (referencing section 509 of
1010.100(ff)(5); FinCEN, FIN–2013–G001,
including name, address, and other the Gramm-Leach-Bliley Act for definition of Application of FinCEN’s Regulations to Persons
‘‘Federal functional regulator’’ and noting inclusion Administering, Exchanging, or Using Virtual
identifying information; and (3) of the Commodity Futures Trading Commission). Currencies (Mar. 18, 2013), available at https://
determining whether the person appears Under section 509 of the Gramm-Leach-Bliley Act, www.fincen.gov/system/files/shared/FIN-2013-
on any lists of known or suspected the term ‘‘Federal functional regulator’’ means (A) G001.pdf.
the Board of Governors of the Federal Reserve 20 12 U.S.C. 5903(a)(5)(B). Pursuant to Treasury
6 12 U.S.C. 5903(a)(5)(A). System; (B) the Office of the Comptroller of the Order 101–05 and 31 U.S.C. 321(b)(2), the authority
7 12 U.S.C. 5903(a)(5)(A)(v).
Currency; (C) the Board of Directors of the Federal vested in the Secretary under the GENIUS Act to
8 Certain parts of the Currency and Foreign
Deposit Insurance Corporation; (D) the Director of issue regulations related to the prevention of money
the Office of Thrift Supervision; (E) the National laundering has been delegated to the Director of
Transactions Reporting Act, its amendments, and Credit Union Administration Board; and (F) the
the other statutes relating to the subject matter of FinCEN.
Securities and Exchange Commission. 15 U.S.C. 21 12 U.S.C. 5913(a)–(b); see also 12 U.S.C.
that Act, have come to be referred to as the BSA. 6809(2) (codifying section 509 of the Gramm-Leach-
These statutes are codified at 12 U.S.C. 1829b, 12 5903(a)(4)(A)(iv); 12 U.S.C. 5903(h).
Bliley Act, Pub. L. 106–102, title V, 113 Stat. 1443 22 Certain PPSIs, defined in the GENIUS Act as
U.S.C. 1951–1960, and 31 U.S.C. 5311–5314 and (1999)); see also 31 CFR 1010.100(r) (defining
5316–5336 and notes thereto, with implementing State qualified payment stablecoin issuers, will not
‘‘Federal functional regulator’’).
regulations at 31 CFR chapter X. Consistent with 14 31 CFR 1020.220; 31 CFR 1010.100(d) (defining
be overseen by a Federal functional regulator. See
that understood meaning, as codified, the GENIUS 12 U.S.C. 5901(31); 12 U.S.C. 5906. Consistent with
Act defines the ‘‘Bank Secrecy Act’’ to mean ‘‘(A) ‘‘bank,’’ which includes each agent, agency, branch, FinCEN’s historical practice, this proposed rule
section 1829b of this title [section 21 of the Federal or office within the United States of banks, savings generally treats these institutions in the same way
Deposit Insurance Act]; (B) chapter 2 of title I of associations, credit unions, and foreign banks). it treats PPSIs with a Federal functional regulator.
15 31 CFR 1023.220.
Public Law 91–508 (12 U.S.C. 1951 et seq.); and (C) FinCEN, Customer Identification Program, Anti-
16 31 CFR 1024.220.
subchapter II of chapter 53 of title 31, United States Money Laundering Programs, and Beneficial
Code.’’ 12 U.S.C. 5901(2). 17 31 CFR 1026.220. Ownership Requirements for Banks Lacking a
9 See Treasury Order 180–01 (Jan. 14, 2020), para. 18 MSBs are required, as part of an AML program, Federal Functional Regulator, 85 FR 57129 (Sept.
3, available at https://home.treasury.gov/about/ to maintain policies, procedures, and internal 15, 2020) (amending 31 CFR 1020.220 so banks
lotter on DSK8BHNXB4PROD with PROPOSALS2
general-information/orders-and-directives/treasury- controls to verify customer identification. 31 CFR lacking a Federal functional regulator are covered
order-180-01; see also 31 U.S.C. 310(b)(2)(I) 1022.210(d)(1)(i)(A). MSBs are also required to, for by the bank CIP rule). For purposes of State
(providing that the Director of FinCEN shall transmittals of funds over $3,000, collect qualified payment stablecoin issuers, FinCEN is
‘‘[a]dminister the requirements of subchapter II of identifying information and, at times, verify issuing this proposal without a Federal functional
chapter 53 of this title, chapter 2 of title I of Public identity. 31 CFR 1010.410(e)(1)–(3); see also 31 CFR regulator.
Law 91–508, and section 21 of the Federal Deposit 1022.400. MSBs also must verify and record 23 Treasury, GENIUS Act Implementation, 90 FR
Insurance Act, to the extent delegated such identifying information for transactions in currency 45159 (Sept. 19, 2025). The ANPRM also solicited
authority by the Secretary of the Treasury’’). that individually or in aggregate exceed $10,000. comment on a range of potential Treasury efforts
10 31 U.S.C. 5318(l)(1). See 31 CFR 1010.312; see also 31 CFR 1022.312. related to the GENIUS Act that are outside the
VerDate Sep<11>2014 21:08 Jun 18, 2026 Jkt 268001 PO 00000 Frm 00004 Fmt 4701 Sfmt 4702 E:\FR\FM\22JNP2.SGM 22JNP2
Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules 37237
response to this ANPRM, Treasury payment stablecoin regulator,’’ 32 and enable or prohibit subsequent
received approximately 450 timely ‘‘State qualified payment stablecoin transactions in the stablecoin, and
comments from a variety of issuer.’’ 33 Generally speaking, the redeem stablecoins. The smart contracts
stakeholders, including banks and credit proposed definitions in the PPSI AML/ underlying most stablecoins maintain a
unions, stablecoin issuers, digital asset CFT NPRM track the language the ledger of the number of stablecoins
exchanges, analytics companies, law GENIUS Act uses to define those terms, ‘‘owned by a set of accounts where each
firms, trade associations, non- with a few proposed technical account is owned by a blockchain
governmental organizations, technology modifications that are intended to be address’’ or wallet.39
firms, academics, and members of the non-substantive. The liquidity and stability of
public. In crafting this proposal, stablecoins relative to other digital
IV. Overview of Stablecoins and Issuers assets and rapid settlement of
Treasury reviewed and considered the
pertinent comments, including those The GENIUS Act only governs a stablecoins make them appealing to
related to illicit finance topics. subcategory of stablecoins, namely illicit actors as well as legitimate
This NPRM represents one piece of ‘‘payment stablecoins’’ as defined by the users.40 Currently, most legitimate users
the comprehensive regulatory GENIUS Act, and a subcategory of actors primarily rely on stablecoins to store
framework for PPSIs set out in the in the payment stablecoin ecosystem, value or facilitate trades in other digital
GENIUS Act.24 In a separate rulemaking, most critically for this rulemaking, assets. Payment stablecoins have the
FinCEN has proposed a rule to PPSIs.34 Thus, under the GENIUS Act, potential, however, to become a more
implement the GENIUS Act’s directive not all stablecoins are payment widely adopted form of payment.41
to apply anti-money laundering stablecoins and not all stablecoin Illicit actors have increasingly used
obligations to PPSIs (referred to as issuers will be eligible to be PPSIs. stablecoins to facilitate transactions and
‘‘PPSI AML/CFT NPRM’’), including Because the GENIUS Act framework is store proceeds.42 The U.S. government
program, reporting, and recordkeeping not yet in place, however, it is not has linked stablecoins to a range of
obligations, among others.25 The PPSI determined which specific stablecoins illicit activities, including money
AML/CFT NPRM proposes adding will be payment stablecoins and which laundering, and bad actors, including
several new definitions arising from the specific stablecoin issuers will be PPSIs. scammers and fraudsters; 43 Democratic
GENIUS Act to chapter X, which are An understanding of the stablecoin People’s Republic of Korea information
here used to describe this proposed rule. ecosystem, uses of stablecoins, and risks technology workers, cybercriminal
These definitions include ‘‘digital associated with stablecoins generally groups, and related money laundering
informs the parameters of the proposed
asset,’’ 26 ‘‘distributed ledger,’’ 27
rule, including the rationale behind perform any given set of pre-determined functions
‘‘payment stablecoin,’’ 28 ‘‘permitted or conditions that are recorded on a blockchain. See
certain proposed obligations.
payment stablecoin issuer,’’ 29 ‘‘primary National Institute of Standards and Technology
Federal payment stablecoin A. Stablecoins and Their Uses (NIST), NISTIR 8202, Blockchain Technology
regulator,’’ 30 ‘‘Federal qualified Overview, p. 32 (Oct. 2018) [hereinafter Blockchain
Stablecoins are a blockchain-based 35 Technology Overview], available at https://
payment stablecoin issuer,’’ 31 ‘‘State digital asset 36 designed to maintain a nvlpubs.nist.gov/nistpubs/ir/2018/NIST.IR.8202.pdf
stable value relative to an underlying (‘‘A smart contract can perform calculations, store
purview of this rulemaking. For example, the information, expose properties to reflect a publicly
asset, most often—but not always—a fiat exposed state and, if appropriate, automatically
ANPRM included questions related to the GENIUS
Act prohibition on digital asset service providers currency.37 Most stablecoin issuers use send funds to other accounts.’’).
offering and selling a payment stablecoin to any smart contracts 38 to issue stablecoins, 39 NIST, NISTIR 8408, Understanding Stablecoin
person in the United States unless the payment Technology and Related Security Considerations, p.
stablecoin is issued by a PPSI or a foreign payment 32 See 12 U.S.C. 5901(30). 6 (sec. 3.2) (Sept. 2023), available at https://
stablecoin issuer that meets certain requirements. 33 See 12 U.S.C. 5901(31). nvlpubs.nist.gov/nistpubs/ir/2023/
Id. at 45160–61. It also included questions related 34 See, e.g., 12 U.S.C. 5902, 5903.
NIST.IR.8408.pdf. The lynchpin of a blockchain is
to Treasury’s role in determining whether a state- asymmetric (public key) cryptography, which is
35 A blockchain is ‘‘any technology where data is:
level regulatory regime is substantially similar to used to secure and send transactions on a
the federal framework and whether a foreign (i) shared across a network to create a public ledger blockchain. See Blockchain Technology Overview,
country’s regulatory and supervisory regime is of verified transactions or information among supra note 38, p. 11. First, a user generates a private
comparable to the U.S. framework. Id. at 45162–63. network participants; (ii) linked using cryptography key (a string of characters that function like a
24 See, e.g., FDIC, Approval Requirements for to maintain the integrity of the public ledger and password) and uses that private key to generate a
to execute other functions; (iii) distributed among public key (an account number on a blockchain
Issuance of Payment Stablecoins by Subsidiaries of
network participants in an automated fashion to known as an address). Without the private key
FDIC-Supervised Insured Depository Institutions, 90
concurrently update network participants on the associated with an address or public key, a user
FR 59409 (Dec. 19, 2025); NCUA, Investments in
state of the public ledger and any other functions; cannot access the digital assets contained within.
and Licensing of Permitted Payment Stablecoins
and (iv) composed of source code that is publicly Developers have created software or hardware
Issuers, 91 FR 6531 (Feb. 12, 2026); OCC,
available.’’ Executive Order (E.O.) 14178, wallets to enable users to manage their public and
Implementing the Guiding and Establishing
Strengthening American Leadership in Digital private keys and safeguard their assets more easily.
National Innovation for U.S. Stablecoins Act for the
Financial Technology, sec. 2(b), 90 FR 8647 (Jan. See E.O. 14178 Report, supra note 37, pp. 9–10.
Issuance of Stablecoins by Entities Subject to the
31, 2025). 40 See Treasury, 2026 National Money Laundering
Jurisdiction of the Office of the Comptroller of the 36 For this proposed rule, a ‘‘digital asset’’ is ‘‘any
Currency, 91 FR 10202 (Mar. 2, 2026); Treasury, Risk Assessment, p. 50 (Mar. 2026) [hereinafter
GENIUS Act Broad-Based Principles for digital representation of value that is recorded on 2026 NMLRA], available at https://
Determining Whether a State-Level Regulatory a cryptographically secured distributed ledger.’’ See home.treasury.gov/system/files/246/2026-
Regime Is Substantially Similar to the Federal 12 U.S.C. 5901(6). NMLRA.pdf; E.O. 14178 Report, supra note 37, p.
Regulatory Framework, 91 FR 16844 (Apr. 3, 2026);
37 White House, Strengthening American 94.
FDIC, GENIUS Act Requirements and Standards for Leadership in Digital Financial Technology, p. 88 41 E.O. 14178 Report, supra note 37, p. 91.
FDIC-Supervised Permitted Payment Stablecoin (July 2025) [hereinafter E.O. 14178 Report], 42 See 2026 NMLRA, supra note 40, p. 50.
available at https://www.whitehouse.gov/wp-
lotter on DSK8BHNXB4PROD with PROPOSALS2
Issuers and Insured Depository Institutions, 91FR 43 See, e.g., Compl., United States v.
18534 (Apr. 10, 2026). content/uploads/2025/07/Digital-Assets-Report- Approximately 225,364,961 USDT, No. 25–cv–1907
25 See PPSI AML/CFT NPRM, supra note 4. EO14178.pdf. This report was issued by the (D.D.C. June 18, 2025) (civil forfeiture action against
26 See 12 U.S.C. 5901(6). Presidential Working Group on Digital Asset more than $225.3 million in stablecoins allegedly
27 See 12 U.S.C. 5901(8).
Markets, of which the Secretary of the Treasury is involved in concealing proceeds of digital assets
a member, pursuant to E.O. 14178. investment fraud); United States v. Su, No. 25–cr–
28 See 12 U.S.C. 5901(22).
38 A smart contract is a ‘‘collection of code and 362 (C.D. Cal. Jan. 27, 2026) (defendant sentenced
29 See 12 U.S.C. 5901(23).
data . . . that is deployed using cryptographically to 46 months in prison for role in digital investment
30 See 12 U.S.C. 5901(25).
signed transactions’’ on a blockchain network, scam involving $36.9 million where victim funds
31 See 12 U.S.C. 5901(11). which is executed by nodes on a blockchain to were converted to stablecoins).
VerDate Sep<11>2014 21:08 Jun 18, 2026 Jkt 268001 PO 00000 Frm 00005 Fmt 4701 Sfmt 4702 E:\FR\FM\22JNP2.SGM 22JNP2
37238 Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules
networks; 44 drug traffickers; 45 terrorist issuer issues stablecoins to such CIP requirements similar to such
groups; 46 and sanctions evasion and financial institutions, those financial institutions is expected to increase the
money laundering networks,47 among institutions put the stablecoins into effectiveness and efficiency of CIP
others. broader circulation to other users, such programs and facilitate the ability of
as individual retail users.50 PPSIs and other financial institutions
B. Issuers and Interactions With Users
Due to the use of smart contracts with CIP requirements to rely on
Most stablecoins backed by financial underlying stablecoin transactions and another institution’s performance of any
assets, including fiat currency, have how users interact with stablecoin procedure related to a CIP, with the
centralized control, meaning that one issuers, the ecosystem can, broadly recommended safeguards contained in
company, or a group of companies, are speaking, be divided into two proposed 31 CFR 1033.220(a)(6).
responsible for governance functions, components, the primary market and
including defining and ensuring In crafting this proposal, FinCEN and
the secondary market. For purposes of the Agencies have considered the
compliance with standards related to this rulemaking, FinCEN and the
the issuance, purchase, redemption, statutory factors articulated in the BSA,
Agencies will use the term ‘‘primary specifically the various types of
custody, and transfer of the stablecoin. market’’ to generally describe a PPSI
Currently, many stablecoin issuers accounts PPSIs may maintain, the
interacting directly with a user or holder various methods of opening accounts,
generally interact directly with a small of a payment stablecoin, such as when
number of larger companies—which are and the various types of identifying
a PPSI engages in issuing, converting, information available.54 Most notably,
often institutional participants in the redeeming, repurchasing, burning, and
trading of digital assets (i.e., digital asset FinCEN and the Agencies recognize that
reissuing payment stablecoins, as well these factors may vary significantly by
exchanges).48 Those companies, in turn, as providing associated services, such as
interact with a larger and more diverse the size and complexity of the PPSI, the
providing custodial services.51 FinCEN activities in which it engages, and the
group of users. Many stablecoin issuers and the Agencies will use the term
predominantly offer issue and types of customers it has. Accordingly,
‘‘secondary market’’ to describe rather than prescribe a one-size-fits-all
redemption services to financial payment stablecoin activity that does
institutions, including digital asset approach, FinCEN and the Agencies
not directly involve the PPSI as a party direct that a PPSI’s CIP should address
exchanges that may be regulated under to the transaction other than via a smart
the BSA as MSBs.49 Generally, once an the types of accounts it intends to
contract. For example, secondary market maintain, how it allows those accounts
44 See, e.g., Indictment, United States v. Sop, No.
activity could include an individual to be opened, and the types of
23–cr–128 (D.D.C. Mar. 18, 2023) (alleging purchasing payment stablecoins from identifying information available. In
defendant laundered proceeds of DPRK IT workers intermediaries, an individual sending a defining ‘‘account,’’ as noted below, the
in violation of sanctions, including through use of payment stablecoin from a self-hosted
stablecoins); DOJ, Press Release, Department Files proposal takes into consideration the
Civil Forfeiture Complaint Against Over $7.74M
wallet to a vendor to purchase goods, an range of activities in which a PPSI can
Laundered on Behalf of the North Korean individual exchanging payment engage and the types of accounts that a
Government (June 5, 2025), available at https:// stablecoins for another digital asset via PPSI may maintain.
www.justice.gov/opa/pr/department-files-civil- a digital asset exchange, or person-to-
forfeiture-complaint-against-over-774m-laundered- Relatedly, as mentioned above, the
behalf-north-korean; United States of America v. person transactions in payment
Approximately 1,159,834.52 USDT, No. 25–cv– stablecoins. GENIUS Act directs the Secretary to
3771 (D.D.C. Oct. 24, 2025) (civil forfeiture tailor BSA obligations to the size and
complaint of stablecoins related to virtual currency V. Section-by-Section Analysis complexity of an issuer.55 This proposal
heists perpetrated by DPRK hacking groups).
45 See, e.g., United States v. Zhang et al., No. 22–
As required by the GENIUS Act, this meets that requirement by proposing
cr–10279 (Aug. 15, 2025) (defendants sentenced to rulemaking proposes a CIP obligation regulatory text that requires a PPSI to
prison in connection with drug trafficking scheme for accounts maintained by PPSIs.52 tailor its CIP to that PPSI’s size and type
involving conversion of proceeds to stablecoins); Obligations under this proposal are of business, as well as take into
see also, DOJ, Press Release, Two Men Sentenced
for Role in International Money Laundering and comparable to existing CIP requirements consideration the PPSI’s risk based on
Drug Trafficking Conspiracy (Aug. 15, 2025), for other financial institutions, such as its unique business—including the
available at https://www.justice.gov/usao-ma/pr/ banks, brokers-dealers, mutual funds, types of accounts it has, how those
two-men-sentenced-role-international-money- and futures commission merchants and accounts are opened, and the
laundering-and-drug-trafficking-conspiracy.
46 See, e.g., DOJ, Press Release, Justice introducing brokers in commodities. identifying information available. Other
Department Disrupts Hamas Terrorist Financing PPSIs likely will frequently interact policy options to tailor for size and
Scheme Through Seizure of Cryptocurrency (Mar. with financial institutions that are complexity were considered including,
27, 2025), available at https://www.justice.gov/opa/ already subject to CIP requirements, and for example, a CIP obligation that would
pr/justice-department-disrupts-hamas-terrorist-
financing-scheme-through-seizure-cryptocurrency; in some cases, PPSIs will be subsidiaries fluctuate solely based on the size of an
United States of America v. Nine Cryptocurrency of insured depository institutions with issuer. FinCEN and the Agencies have
Wallets Held by Tether Ltd. and Seven CIP requirements.53 Subjecting PPSIs to preliminarily assessed, however, that
Cryptocurrency Wallets Held by Binance Holdings such an approach, however, could harm
Ltd., No. 24–cv–01251 (D.D.C. Nov. 13, 2025)
(involving a civil forfeiture of approximately $2
50 See, e.g., E.O. 14178 Report, supra note 37, pp. national security by providing weaker
million dollars in digital currency connected to a 18–20. points of entry to the financial system,
51 If consistent with the law and authorized by a
Gaza-based money transfer business that was but request comment on its approach.
involved in financially supporting Hamas). primary Federal stablecoin regulator or the State
47 Treasury, Press Release, Treasury Exposes payment stablecoin regulator, as applicable, PPSIs This CIP proposal necessarily results in
Money Laundering Network Using Digital Assets to can also engage in activities as a ‘‘digital asset tailored obligations, which comports
lotter on DSK8BHNXB4PROD with PROPOSALS2
Evade Sanctions (Dec. 4, 2024), available at https:// service provider,’’ as defined by the GENIUS Act, with the GENIUS Act, mitigates the risk
home.treasury.gov/news/press-releases/jy2735. and activities incidental thereto. Such activities of weaker points of entry, and best
48 See Watsky, Cy, et al., Primary and Secondary include exchanging and transferring digital assets.
Markets for Stablecoins, FEDS Notes, Washington: See 12 U.S.C. 5903(a)(7)(B), 5901(7). Such activity
Board of Governors of the Federal Reserve System would also constitute primary market activity. which have CIP requirements, or be chartered by
(Feb. 23, 2024), available at https://doi.org/ 52 See 12 U.S.C. 5903(a)(5)(A)(v). the OCC as national trust banks. See 12 U.S.C.
10.17016/2380-7172.3447. 53 As explained more fully in the PPSI AML/CFT 5901(11), (23).
54 See 31 U.S.C. 5318(l)(3).
49 See id.; see also E.O. 14178 Report, supra note NPRM, supra note 4, in some cases PPSIs will be
37, p. 105. subsidiaries of insured depository institutions, 55 12 U.S.C. 5903(a)(5)(B).
VerDate Sep<11>2014 21:08 Jun 18, 2026 Jkt 268001 PO 00000 Frm 00006 Fmt 4701 Sfmt 4702 E:\FR\FM\22JNP2.SGM 22JNP2
Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules 37239
protects the U.S. financial system from relationship. Put differently, the term financial transactions.’’ 60 The proposed
illicit activity. ‘‘customer’’ is not meant to apply where examples are based on the GENIUS
a transfer is the result of third parties Act’s provision limiting PPSI activities,
A. Proposed 31 CFR 1033.100—
and a payment stablecoin user’s only including the GENIUS Act rule of
Definitions
interaction with the PPSI is through a construction that clarifies a PPSI can
FinCEN and the Agencies propose smart contract. engage in digital asset service provider
promulgating in § 1033.100 three new Moreover, interaction with a smart activities or activities incidental thereto
definitions with respect to the proposed contract does not currently result in a to the extent where those activities are
CIP obligation—account, customer, and PPSI acquiring the kind of information consistent with all other Federal and
digital asset service provider.56 The needed to verify an identity. Imposing State laws and authorized by the
definitions are proposed for purposes of an obligation where any payment appropriate primary Federal or State
this CIP rulemaking and would only stablecoin transfer could, for purposes payment stablecoin regulator.61 As
apply to the CIP obligation unless of a CIP obligation, result in a customer proposed, the illustrative list would
otherwise expressly noted.57 and account relationship with a PPSI include: (i) issuing or redeeming a
The definitions discussed in this would essentially impose on PPSIs a payment stablecoin; (ii) managing
proposal are designed to clarify that a global obligation to collect and verify related reserves, including purchasing,
PPSI’s CIP obligation extends to direct identifying information of individual selling, and holding reserve assets or
relationships, i.e., primary market users. FinCEN and the Agencies assess providing custodial services for reserve
activity, and does not extend to activity that such a CIP obligation would be assets; (iii) providing custodial or
where the only interaction is with a nearly impossible for PPSIs to safekeeping services for payment
PPSI’s smart contract. Consistent with implement and could potentially stablecoins, required reserves, or private
the BSA, the CIP requirements for other cripple the industry. FinCEN and the keys of payment stablecoins; (iv) other
types of financial institutions extend to Agencies, however, seek comment on activities that directly support activities
where an institution has some sort of this approach and their assessment of in paragraphs (a)(1)(i), (ii), and (iii); or
formal relationship with an individual the difficulties of such a globally (v) providing services of a digital asset
or entity.58 Based on the language in applicable CIP obligation. service provider that are authorized by
section 4(a)(5) of the GENIUS Act, and the primary Federal payment stablecoin
1. Proposed 31 CFR 1033.100(a)— regulator or the State payment
the analysis undertaken by FinCEN and
Account stablecoin regulator, as applicable,
the Agencies of the stablecoin
ecosystem, FinCEN and the Agencies FinCEN and the Agencies propose consistent with all other Federal and
assess that the term ‘‘customer’’ in adding the definition of ‘‘account’’ at State laws, provided that the claims of
section 4(a)(5) related to ‘‘customer § 1033.100(a). The proposed definition payment stablecoin holders rank senior
identification program’’ pertains to resembles how ‘‘account’’ is defined in to any potential claims of non-
circumstances where the ‘‘customer’’ other CIP rules, but contains unique stablecoin creditors with respect to the
and a PPSI have a direct interaction and provisions that reflect the kinds of reserve assets, consistent with section
activities in which PPSIs can engage. It 11 of the GENIUS Act. FinCEN and the
56 This proposal’s definitions are in addition to also considers, as the BSA requires, the Agencies assess that providing such
other terms defined in the GENIUS Act and types of accounts PPSIs may maintain. examples promotes clarity while leaving
proposed to be codified by FinCEN as part of the The proposed text defines an room for innovations in the industry
PPSI AML/CFT NPRM, see supra note 4, most
notably, ‘‘digital asset,’’ ‘‘distributed ledger,’’ ‘‘account’’ in paragraph (a)(1) as a that could create new, but similar,
‘‘payment stablecoin,’’ ‘‘permitted payment formal relationship between a PPSI and relationships between a PPSI and a
stablecoin issuer,’’ ‘‘primary Federal payment a customer, established to provide or person that involves a formal
stablecoin regulator,’’ ‘‘Federal qualified payment engage in services, dealings, or other relationship and could fall under the
stablecoin issuer,’’ ‘‘State payment stablecoin
regulator,’’ and ‘‘State qualified payment stablecoin financial transactions. The ‘‘formal ‘‘account’’ definition.
issuer.’’ relationship’’ language mimics most Unlike with other types of financial
57 As noted in the PPSI AML/CFT NPRM, see other CIP rules promulgated under the institutions with CIP requirements, an
supra note 4, for example, the term ‘‘account’’ is BSA.59 FinCEN and the Agencies are individual with no established
used in various FinCEN regulations and in the relationship with a PPSI could hold a
GENIUS Act, but the definition of account in this
proposing carrying this language over to
proposed CIP rule generally only applies to CIP the PPSI CIP to promote consistency, PPSI’s product, specifically a payment
requirements set out in this proposed rule, part efficiency, and the ability of institutions stablecoin, and then seek to engage
1033, unless otherwise expressly noted. Compare to rely on each other for CIP procedures directly with a PPSI for a financial
31 CFR 1010.230(c) (referencing in beneficial service. For example, an individual who
ownership requirement the CIP definitions of
(subject safeguards). FinCEN and the
‘‘account’’) with 1010.605(c)(2) (defining ‘‘account’’ Agencies request comment, however, on has no established relationship with the
for purposes of special due diligence obligations for whether the formal relationship PPSI could acquire a payment
correspondent accounts and private banking language is sufficiently clear. stablecoin from, for example, an
accounts, without reference to the CIP definitions exchange, and seek to redeem it with
of ‘‘account’’). As discussed in the PPSI AML/CFT
Similar to the definition of ‘‘account’’
NPRM, the GENIUS Act directs that PPSIs have the for other financial institutions subject to the PPSI. That redemption could
technological capability to comply, and will CIP requirements, the proposed establish an account with the PPSI and
comply, with the terms of any lawful orders. See definition of account contains an make the individual a customer.
12 U.S.C. 5903(a)(6)(B). Lawful order is defined, in FinCEN requests comment on whether
part, by using ‘‘account.’’ See 12 U.S.C. 5901(16)(B).
illustrative list of activities that may fall
FinCEN is not intending, however, to apply the within ‘‘services, dealings, or other the CIP proposal should be refined or
lotter on DSK8BHNXB4PROD with PROPOSALS2
proposed CIP definition of account to that clarified to account for such activity.
obligation. 59 See 31 CFR 1020.100(a)(1) (defining ‘‘account’’ The proposed definition also provides
58 See, e.g., 31 CFR 1020.100 (defining ‘‘account’’ for bank CIP); 31 CFR 1023.100(a)(1) (defining instances where activity does not form
in bank CIP as ‘‘a formal banking relationship’’); ‘‘account’’ for broker-dealer CIP); 31 CFR
1023.100 (defining ‘‘account’’ in broker-dealer CIP 1026.100(a)(1) (defining ‘‘account’’ for futures
an account relationship. Two of these
as ‘‘a formal relationship’’); see also 31 U.S.C. commission merchants and introducing brokers in
60 See 31 CFR 1020.100(a), 1023.100(a),
5318(l) (setting forth obligations related to verifying commodities CIP); but see 31 CFR 1024.100(a)(1)
the identity of ‘‘customers . . . in connection with (defining ‘‘account’’ for mutual fund CIP as a 1024.100(a), 1026.100(a).
the opening of an account’’). ‘‘contractual or other business relationship’’). 61 See 12 U.S.C. 5903(a)(7).
VerDate Sep<11>2014 21:08 Jun 18, 2026 Jkt 268001 PO 00000 Frm 00007 Fmt 4701 Sfmt 4702 E:\FR\FM\22JNP2.SGM 22JNP2
37240 Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules
subparagraphs are intended to make service provider’’ at § 1033.100(c) for GENIUS Act definition of digital asset
clear that purely secondary market the purposes of a PPSI’s CIP obligations service provider.
payment stablecoin activity does not because the term is used in the First, the proposed definition
form a formal relationship between a proposed definition of ‘‘account.’’ As modifies the GENIUS Act definition of
PPSI and a payment stablecoin user or discussed, the GENIUS Act expressly digital asset service provider by
holder. That list provides that the term reserves the ability of a PPSI to engage replacing the statutory term ‘‘person’’ in
‘‘account’’ does not include a product or in the digital asset service provider that definition with the text the GENIUS
service where a formal relationship is activities, where such activities are Act uses to define ‘‘person’’ in 12 U.S.C.
not established with a person, such as authorized by the appropriate primary 5901(24).64 This change is proposed
payment stablecoin activity that does Federal payment stablecoin regulator or because the term ‘‘person’’ is already
not directly involve the PPSI as a party State payment stablecoin regulator.62 To defined in FinCEN regulations at 31
to the transaction other than via a smart help ensure such activities are CFR 1010.100(mm) 65 and differs from
contract. It also specifies that ownership appropriately included in activities that the GENIUS Act definition of
or control of a PPSI’s payment could create an account relationship ‘‘person.’’ 66 FinCEN’s regulatory
stablecoins alone, without other with a PPSI, FinCEN and the Agencies definition of person includes Indian
indicators of a formal relationship, does propose defining ‘‘digital asset service Tribes as defined in the Indian Gaming
not constitute an account. provider’’ for CIP purposes. Regulatory Act, which the GENIUS Act
Consistent with other CIP rules, the The proposed definition of ‘‘digital definition of person does not include.
proposed text further provides that the asset service provider’’ is consistent Further, FinCEN’s regulatory definition
term ‘‘account’’ does not include an with the definition provided in the also does not characterize the entities
account that the PPSI acquires through GENIUS Act, with certain modifications that comprise the category as ‘‘business’’
an acquisition, merger, purchase of in light of preexisting FinCEN entities, as the GENIUS Act definition
assets, or assumption of liabilities from regulatory definitions.63 Under the does. To ensure the definition of
a financial institution regulated by a proposed rule, the term ‘‘digital asset ‘‘digital asset service provider’’ for
Federal functional regulator or a bank service provider’’ would mean an PPSIs accurately applies to the
regulated by a State bank regulator or an individual, partnership, company, ‘‘persons’’ that Congress intended, as
account opened for the purpose of corporation, association, trust, estate, evidenced by the GENIUS Act definition
participating in an employee benefit cooperative organization, or other of the term, FinCEN and the Agencies
plan established under the Employee business entity, incorporated or propose incorporating the GENIUS Act
Retirement Income Security Act of 1974. unincorporated that, for compensation definition of person into the regulatory
or profit, engages in business in the definition of ‘‘digital asset service
2. Proposed 31 CFR 1033.100(b)—
United States (including on behalf of provider.’’
Customer Second, the proposed definition of
customers or users in the United States)
FinCEN and the Agencies propose of: (A) exchanging digital assets for ‘‘digital asset service provider’’
adding the definition of ‘‘customer’’ at monetary value, meaning a national incorporates the GENIUS Act definition
§ 1033.100(b) for the purposes of a currency or deposit denominated in a of ‘‘monetary value’’ as provided in 12
PPSI’s CIP obligation. The proposal national currency; (B) exchanging U.S.C. 5901(17).67 FinCEN has two
would define customer as (i) a person digital assets for other digital assets; (C) similar terms, ‘‘monetary instruments’’
that opens a new account; and (ii) an transferring digital assets to a third and ‘‘currency,’’ that are already defined
individual who opens a new account party; (D) acting as a digital asset in its regulations at 31 CFR
for: (A) an individual who lacks legal custodian; or (E) participating in 1010.100(dd) 68 and 31 CFR
capacity, such as a minor; or (B) an financial services relating to digital asset
entity that is not a legal person, such as issuance. The proposed definition also 64 See 12 U.S.C. 5901(24) (defining ‘‘person’’ as
a civic club. provides that the term ‘‘digital asset ‘‘an individual, partnership, company, corporation,
association, trust, estate, cooperative organization,
The proposed definition also provides service provider’’ does not include: (i) a or other business entity, incorporated or
that the term ‘‘customer’’ does not distributed ledger protocol; (ii) unincorporated’’).
include: (i) a financial institution developing, operating, or engaging in 65 See 31 CFR 1010.100(mm) (defining ‘‘Person’’
regulated by a Federal functional the business of developing distributed as ‘‘An individual, a corporation, a partnership, a
trust or estate, a joint stock company, an
regulator or a bank regulated by a State ledger protocols or self-custodial association, a syndicate, joint venture, or other
bank regulator; (ii) a person described in software interfaces; (iii) an immutable unincorporated organization or group, an Indian
§ 1020.315(b)(2) through (4) of 31 CFR and self-custodial software interface; Tribe (as that term is defined in the Indian Gaming
chapter X; (iii) a person that has an (iv) developing, operating, or engaging Regulatory Act), and all entities cognizable as legal
personalities’’).
existing account with the PPSI, in the business of validating transaction 66 See 12 U.S.C. 5901(24).
provided the PPSI has a reasonable or operating a distributed ledger; or (v) 67 See 12 U.S.C. 5901(17) (defining ‘‘monetary
belief that it knows the true identity of participating in a liquidity pool or other value’’ as ‘‘a national currency or deposit (as
the person; or (iv) a person acquiring or similar mechanism for the provisioning defined in section [3 of the Federal Deposit
redeeming a payment stablecoin from a of liquidity for peer-to-peer transactions. Insurance Act (12 U.S.C. 1813))] denominated in a
national currency’’).
means other than directly from or The proposed definition of digital asset 68 See 31 CFR 1010.100(dd) (defining ‘‘Monetary
directly to the PPSI. The final provision service provider will also state the instruments’’ as ‘‘(1) Monetary instruments include:
promotes FinCEN and the Agencies’ meaning of ‘‘distributed ledger (i) Currency; (ii) Traveler’s checks in any form; (iii)
determination that transfers of payment protocol,’’ as defined by 12 U.S.C. All negotiable instruments (including personal
checks, business checks, official bank checks,
lotter on DSK8BHNXB4PROD with PROPOSALS2
stablecoins on the secondary market do 5901(9). cashier’s checks, third-party checks, promissory
not make a party to the transfer a This proposed definition modifies the notes (as that term is defined in the Uniform
customer of a PPSI. GENIUS Act language in three respects. Commercial Code), and money orders) that are
None of the changes are intended to either in bearer form, endorsed without restriction,
3. Proposed 31 CFR 1033.100(c)—Digital made out to a fictitious payee (for the purposes of
substantively change the meaning of the
Asset Service Provider § 1010.340), or otherwise in such form that title
thereto passes upon delivery; (iv) Incomplete
FinCEN and the Agencies propose 62 12 U.S.C. 5903(a)(7)(B).
instruments (including personal checks, business
adding a definition of ‘‘digital asset 63 See 12 U.S.C. 5901(7). checks, official bank checks, cashier’s checks, third-
VerDate Sep<11>2014 21:08 Jun 18, 2026 Jkt 268001 PO 00000 Frm 00008 Fmt 4701 Sfmt 4702 E:\FR\FM\22JNP2.SGM 22JNP2
Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules 37241
1010.100(m).69 To avoid confusion the different aspects of each entity’s i. Proposed 31 CFR 1033.220(a)(2)(i)—
between the existing definitions and the business and activities and satisfies Customer Information Required
definition in the GENIUS Act, FinCEN each of the risk-based AML/CFT
Proposed § 1033.220(a)(2)(i) would
and the Agencies propose including the program and other applicable BSA and
specify identifying information that a
GENIUS Act definition of ‘‘monetary GENIUS Act requirements to which the
CIP must account for in procedures for
value’’ within the definition of ‘‘digital PPSI or parent is subject. Likewise, an
opening an account. The proposed rule
asset service provider.’’ enterprise may elect to implement an
Third, and finally, the proposed would require a PPSI to obtain from
enterprise-wide CIP rather than each customer the following
definition of ‘‘digital asset service maintain separate CIPs for a parent and
provider’’ also incorporates the GENIUS information prior to opening an
subsidiary. In doing so, however, the account: (1) name; (2) date of birth, for
Act definition ‘‘distributed ledger enterprise-wide CIP would need to
protocol’’ as provided in 12 U.S.C. an individual; or date of formation, for
account for the legal and regulatory a person that is not an individual; (3)
5901(9).70 The term ‘‘distributed ledger obligations of both the parent and address (a residential and mailing
protocol’’ is not otherwise used in the subsidiary. Relatedly, where a PPSI is address for individuals, or the principal
proposed regulation, so FinCEN and the also a national trust bank, the entity place of business, local office, or other
Agencies propose including the term could create a single CIP covering all the physical address and mailing address
and its definition within the definition entity’s regulatory obligations. for a person other than an individual);
of ‘‘digital asset service provider.’’
2. Proposed 31 CFR 1033.220(a)(2)— and (4) an identification number.
B. Proposed 31 CFR 1033.220— Identity Verification Procedures The proposed rule would require that
Customer Identification Program a PPSI collect a residential or business
Proposed § 1033.220(a)(2) would street address for an individual. If the
1. Proposed 31 CFR 1033.220(a) and
impose obligations related to identity individual does not have a residential or
(a)(1)—Minimum Requirements
verification procedures, effectuating 31 business street address, the individual
Proposed § 1033.220(a) would U.S.C. 5318(l)(2)(A). It would require may provide an Army Post Office or a
establish the minimum standards for a that the CIP include risk-based Fleet Post Office box number or the
CIP. Proposed § 1033.220(a)(1) would procedures for verifying the identity of residential or business street address of
require a PPSI to establish and maintain each customer to the extent reasonable a next of kin or another contact
a written CIP. The CIP would be and practicable. The procedures must individual. If the customer is a
required to be appropriate for a PPSI’s enable the PPSI to form a reasonable corporation, partnership or trust, it must
size and business. belief that it knows the identity of each provide the address of its principal
As with the CIP rule for banks and customer. The procedures must be place of business, local office, or other
other financial institutions with CIP based on the PPSI’s assessment of the physical location. A Post Office (PO)
obligations, a PPSI’s CIP would be relevant risks, including those presented box is not an acceptable type of address
required to be a part of the PPSI’s anti- by the various types of accounts for the purposes of the proposed rule.
money laundering and countering the maintained by the PPSI, the various Similarly, although some virtual offices
financing of terrorism (AML/CFT) methods of opening accounts provided or commercial mail receiving agencies
program. As discussed in the PPSI by the PPSI, the various types of provide an address for an entity or
AML/CFT NPRM, FinCEN and the identifying information available, and individual to use, similar to a PO box,
Agencies recognize the value of the PPSI’s size, location, and customer the address provided is not an actual
enterprise-wide compliance efforts. base. place of business or residence for the
Where a PPSI is a subsidiary of an entity or individual and does not
As with existing CIP rules, the rule
insured depository institution, FinCEN evidence a physical location for the
proposes to include the term ‘‘risk-
and the Agencies anticipate that the customer.75 Accordingly, such
based’’ as a descriptor of these
enterprise may elect to extend a single addresses are not acceptable physical
procedures.71 The identity verification
AML/CFT program to both entities and locations for purposes of the proposed
that doing so would be permissible so procedures would need to be based on
the PPSI’s assessment of the relevant rule.
long as a comprehensive AML/CFT
risks, and take into consideration the The proposed rule would also require
program is reasonably designed to
types of accounts the PPSI maintains, collection of an identification number.
identify and mitigate the risks posed by
the different methods of opening For U.S. persons this would be a
accounts, and the types of identifying taxpayer identification number. For
party checks, promissory notes (as that term is
defined in the Uniform Commercial Code), and information available.72 Ultimately the non-U.S. persons the identification
money orders) signed but with the payee’s name procedures must enable the PPSI to number could be one or more of the
omitted; and (v) Securities or stock in bearer form form a reasonable belief that it knows following: a taxpayer identification
or otherwise in such form that title thereto passes number, passport number and country
upon delivery. (2) Monetary instruments do not
the true identity of the customer.73 A
include warehouse receipts or bills of lading.’’). risk-based framework reflects the fact of issuance, alien identification card
69 See 31 CFR 1010.100(m) (defining ‘‘Currency’’ that variations in customer relationships number, or number and country of
as ‘‘[t]he coin and paper money of the United States can present varying levels of risks.74 issuance of any other government-
or of any other country that is designated as legal issued document evidencing nationality
tender and that circulates and is customarily used
and accepted as a medium of exchange in the
71 See 31 CFR 1020.220(a)(2), 1023.220(a)(2), or residence and bearing a photograph
country of issuance. Currency includes U.S. silver 1024.220(a)(2), 1026.220(a)(2). or similar safeguard. For a non-U.S.
lotter on DSK8BHNXB4PROD with PROPOSALS2
certificates, U.S. notes and Federal Reserve notes. 72 See 31 U.S.C. 5318(l)(3).
person that is not an individual and that
Currency also includes official foreign bank notes 73 See 31 U.S.C. 5381(l)(2)(A).
does not have an identification number,
that are customarily used and accepted as a 74 See Board, FDIC, FinCEN, NCUA, and OCC,
medium of exchange in a foreign country’’).
the PPSI must request alternative
Joint Statement on the Risk-Based Approach to
70 See 12 U.S.C. 5901(9) (defining ‘‘distributed Assessing Customer Relationships and Conducting
ledger protocol’’ as ‘‘publicly available and Customer Due Diligence (July 6, 2022), available at 75 See United States Postal Service, Domestic Mail
accessible executable software deployed to a https://www.fincen.gov/news/news-releases/joint- Manual, section 508.1.8 (Jan. 18, 2026), available at
distributed ledger, including smart contracts or statement-risk-based-approach-assessing-customer- https://pe.usps.com/cpim/ftp/manuals/dmm300/
networks of smart contracts’’). relationships-and. 508.pdf.
VerDate Sep<11>2014 21:08 Jun 18, 2026 Jkt 268001 PO 00000 Frm 00009 Fmt 4701 Sfmt 4702 E:\FR\FM\22JNP2.SGM 22JNP2
37242 Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules
government-issued documentation they operate and in their These methods may include contacting
certifying the existence of the person. trustworthiness.78 a customer; independently verifying the
The proposed rule provides an FinCEN and the Agencies propose customer’s identity through the
exception for persons applying for a that technological variation and comparison of information provided
taxpayer identification number. innovation are best accounted for by with respect to the customer with
However, the exception would require maintaining the flexibility in the information obtained from a consumer
that the CIP include procedures for proposal relating to how a PPSI verifies reporting agency, public database, or
confirming that the application for a a customer’s identity. This flexibility other source; checking references with
taxpayer identification number was will enable individual PPSIs to assess other financial institutions; or obtaining
filed, as well as obtaining the taxpayer its comfort level with the a financial statement.
identification number within a trustworthiness of various tools and take Under the proposed rule, the PPSI’s
reasonable period of time after the into consideration variation in tools and non-documentary procedures would be
account is opened. differences in risk. FinCEN and the required to address situations where an
Agencies expect that PPSIs would treat individual is unable to present an
ii. Proposed 31 CFR 1033.220(a)(2)(ii)— different digital identity tools unexpired government-issued
Customer Verification differently. For example, a mobile ID or identification document that bears a
driver’s license issued by a state could photograph or similar safeguard; the
Proposed § 1033.220(a)(2)(ii) relates to
constitute an ‘‘unexpired government- PPSI is not familiar with the documents
CIP procedures for verifying the identity
issued identification evidencing presented; the account is opened
of a customer using the information the
nationality or residence and bearing a without obtaining documents; the
PPSI has collected. The proposed rule
photograph or similar safeguard’’ under customer opens the account without
would require that the CIP contains
proposed § 1033.220(a)(2)(ii)(A). A meeting in person; or the PPSI is
procedures for verifying the identity of
digital identity credential offered by a otherwise presented with circumstances
each new customer within a reasonable
non-governmental entity that enables a that increase the risk that the PPSI will
period of time after the customer’s be unable to verify the true identity of
person to prove that they are who they
account is opened. The procedures must claim to be without revealing a customer through documents.
describe when the PPSI will use information other than that fact could,
documents, non-documentary methods, c. Proposed 31 CFR
if appropriate as part of a risk-based
or a combination of both methods. 1033.220(a)(2)(ii)(C)—Additional
procedure, be a non-documentary
FinCEN and the Agencies recognize Verification for Certain Customers
verification method. Accordingly,
the interest in leveraging verifiable FinCEN and the Agencies are not Proposed § 1033.220(a)(2)(ii)(C)
credentials and digital identity as part of proposing regulatory text related to would require that a PPSI’s CIP address
account opening procedures.76 Over 20 verifiable credentials and digital situations where, based on the PPSI’s
years ago when the bank CIP final rule identities, but request comment on this risk assessment of a new account
was promulgated, FinCEN and staff of approach. opened by a customer that is not an
the Board, FDIC, NCUA, OCC, and the individual, the PPSI will obtain
Office of Thrift Supervision (OTS) a. Proposed 31 CFR information about individuals with
recognized in guidance that an 1033.220(a)(2)(ii)(A)—Verification authority or control over such account
‘‘electronic credential’’ was one method Through Documents to verify the customer’s identity. This
that an institution could use to form a The proposed rule states that if the verification method would apply only
reasonable belief that it knows the true PPSI is relying on documents to verify when the PPSI cannot verify the true
identity of its customer.77 Since that a customer’s identity, then the CIP must identity of a customer that is not an
time, digital identity tools have become contain procedures that set forth the individual through either documentary
more commonplace and more documents that the PPSI will use. For or non-documentary methods.
sophisticated. Notably, however, there an individual, the PPSI could use an iii. Proposed 31 CFR
are a variety of digital identity tools and unexpired government-issued 1033.220(a)(2)(iii)—Lack of Verification
applications currently in existence, as identification evidencing nationality or
well as a significant number under residence that contains a photograph or FinCEN and the Agencies believe that,
development. These tools vary in how similar safeguard, such as a driver’s while the majority of customers may be
license or passport. For a person other verified through documentary and non-
76 Treasury, Report to Congress from the Secretary than an individual, such as a documentary methods, there may be
of the Treasury on Innovative Technologies to corporation, partnership, or trust, the instances where this is not possible.
Counter Illicit Finance Involving Digital Assets, pp.
document must show the existence of Proposed § 1033.220(a)(2)(iii) relates to
17–22 (Mar. 2026) [hereinafter Innovation Report], CIP procedures in which the PPSI
available at https://home.treasury.gov/system/files/ the entity, such as certified articles of
246/GENIUS-Act-Illicit-Finance-Innovation- incorporation, a government-issued cannot form a reasonable belief that it
Congressional-Report-March-2026.pdf; see also E.O. business license, a partnership knows the true identity of a customer.
14178 Report, supra note 37, pp. 112–13. The
agreement, or a trust instrument. Under the proposed rule, these
GENIUS Act tasked the Secretary with researching procedures would be required to
innovative or novel models, techniques, or b. Proposed 31 CFR
strategies that regulated financial institutions use, describe: (1) when the PPSI should not
or have the potential to use to detect illicit activity,
1033.220(a)(2)(ii)(B)—Verification open an account; (2) the terms under
including money laundering, involving digital Through Non-Documentary Methods which a customer may use an account
assets, including digital identity verification
lotter on DSK8BHNXB4PROD with PROPOSALS2
For a PPSI relying on non- while the PPSI attempts to verify the
solutions. 12 U.S.C. 5908. Treasury issued a request
for comment in August 2025. See Treasury, Request documentary methods to verify a customer’s identity; (3) when the PPSI
for Comment on Innovative Methods to Detect Illicit customer’s identity, the proposed rule should close an account after attempts
Activity Involving Digital Assets, 90 FR 40148 (Aug. would require the CIP to contain to verify a customer’s identity fail; and
18, 2025). Treasury issued the required (4) when the PPSI should file a
congressional report on March 6, 2026.
procedures that set forth the non-
77 FinCEN, FAQs: Final CIP Rule, p. 6 (Jan. 2004), documentary methods the PPSI will use. Suspicious Activity Report in
available at https://www.fincen.gov/system/files/ accordance with applicable law and
guidance/finalciprule.pdf. 78 See E.O. 14178 Report, supra note 37, p. 112. regulation.
VerDate Sep<11>2014 21:08 Jun 18, 2026 Jkt 268001 PO 00000 Frm 00010 Fmt 4701 Sfmt 4702 E:\FR\FM\22JNP2.SGM 22JNP2
Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules 37243
3. Proposed 31 CFR 1033.220(a)(3)— regulation to seek out all lists of known institutions would have to have a
Records or suspected terrorists or terrorist contract requiring the institution on
The proposed rule in § 1033.220(a)(3) organizations compiled by the Federal which the PPSI seeks to rely to certify
states that the CIP must include government. Instead, PPSIs would annually to the PPSI that it has
procedures for making and maintaining receive separate notification regarding implemented an AML/CFT program and
a record of all information obtained by the lists that must be consulted for will perform (or its agent will perform)
the PPSI through the CIP, effectuating purposes of this provision. the specified requirements of the PPSI’s
Many PPSIs already have procedures CIP. Critically, this proposed provision
31 U.S.C. 5318(l)(2)(B). At a minimum,
in place for determining whether would not change a PPSI’s CIP
proposed § 1033.220(a)(3)(i) would
customers’ names appear on some obligation, and the PPSI would remain
require that the record include: (1) all
Federal lists, including lists that responsible for its compliance.
identifying information about a
identify known terrorists and terrorist This proposal is consistent with other
customer obtained under the CIP; (2) a CIP requirements under the BSA,
organizations. For example, under
description of any document relied on including the bank CIP regulation
current law, there are substantive legal
to verify the identity of the customer where, critically, some banks—but not
requirements associated with lists
under the CIP, noting the type of all banks—are overseen by a Federal
circulated by Treasury’s Office of
document, any identification number functional regulator.80 It does, however,
Foreign Assets Control (OFAC). Failure
contained in the document, the place of create a disparity between PPSIs that
to comply with these requirements may
issuance, and if any, the date of fall under a primary Federal payment
result in criminal or civil penalties.
issuance and expiration date; (3) a stablecoin regulator and a State payment
description of the methods and results 5. Proposed 31 CFR 1033.220(a)(5)— stablecoin regulator.81 A State qualified
of any measures undertaken to verify Customer Notice payment stablecoin issuer would be able
the identity of a customer; and (4) a The proposed rule states in to rely on, for example, a procedure
description of the resolution of each § 1033.220(a)(5) that the CIP must performed by a PPSI that is a subsidiary
substantive discrepancy discovered include procedures for providing of an insured depository institution. But
when verifying the identifying customers with adequate notice that the a PPSI that is a subsidiary of a Federally
information obtained. PPSI is requesting information to verify regulated depository institution, would
Additionally, the proposed rule states their identities. Under the proposed not be able to rely on a procedure
that a PPSI must retain the identifying rule, notice would be considered performed by a State qualified payment
information about a customer obtained adequate if the PPSI generally described stablecoin issuer because such issuers
under § 1033.220(a)(3)(i)(A) for five the identification requirements of this are not overseen by a Federal functional
years after the date the account is closed section and provided such notice in a regulator.
and the information regarding the manner reasonably designed to ensure While the proposal would not permit
verification of a customer’s identity that a prospective customer is able to a PPSI to rely on another entity to
records collected under view the notice, or is otherwise given perform a CIP procedure unless such an
§ 1033.220(a)(3)(i)(B), (C), and (D) for notice, before opening an account. For entity is another Federally regulated
five years after the record is made. example, depending upon the manner financial institution, it should not be
4. Proposed 31 CFR 1033.220(a)(4)— in which the account is opened, a PPSI construed as restricting appropriate use
Comparison With Government Lists may post a notice on its website, of third parties to perform a service
include the notice in its account related to a PPSI’s CIP on the PPSI’s
Proposed § 1033.220(a)(4) would behalf.82 In such cases, however, the CIP
applications, or use any other form of
require a PPSI’s CIP to include obligation would remain with the PPSI.
oral or written notice. The proposed
reasonable procedures for determining
rule provides a sample notice. C. Proposed 31 CFR 1033.220(b)—
whether a customer appears on any list
of known or suspected terrorists or 6. Proposed 31 CFR 1033.220(a)(6)— Exemptions
terrorist organizations issued by any Reliance on Another Financial Proposed § 1033.220(b) would
Federal government agency and Institution provide that the appropriate Federal
designated as such by Treasury in Proposed § 1033.220(a)(6) would functional regulator, with the
consultation with the Federal functional provide that a PPSI’s CIP may include concurrence of the Secretary, may by
regulators, effectuating 31 U.S.C. procedures specifying when a PPSI may order or regulation, exempt any PPSI or
5318(l)(2)(C). The procedures would rely on another Federally regulated any type of account from the
have to require the PPSI to make such financial institution’s performance of a
a determination within a reasonable procedure with respect to any PPSI The Securities and Exchange Commission; or (7)
period of time after the account is The Commodity Futures Trading Commission’’).
customer that is opening or has opened 80 See FinCEN, Customer Identification Program,
opened, or earlier if required by another an account. Such reliance would have to Anti-Money Laundering Programs, and Beneficial
Federal law or regulation or Federal be reasonable under the circumstances, Ownership Requirements for Banks Lacking a
directive issued in connection with the and the other financial institution on Federal Functional Regulator, 85 FR 57129 (Sept.
applicable list. The procedures also 15, 2020) (amending 31 CFR 1020.220 so banks
which the PPSI seeks to rely would have lacking a Federal functional regulator are covered
would have to require the PPSI to follow to be subject to an AML/CFT program by the bank CIP rule).
all Federal directives issued in with CIP requirements, as well as 81 Compare 12 U.S.C. 5905 with 12 U.S.C. 5906.
connection with such lists. regulated by a Federal functional 82 Such third-party arrangements are
lotter on DSK8BHNXB4PROD with PROPOSALS2
Because Treasury and the Federal regulator.79 Additionally, the contemplated, for example, in FAQs issued by
functional regulators have not yet FinCEN, the Board, FDIC, NCUA, OCC, and OTS.
See Board, FDIC, FinCEN, NCUA, OCC, and OTS,
designated any such lists, the proposed 79 See 31 CFR 1010.100(r) (defining ‘‘Federal
Interagency Interpretative Guidance on Customer
rule cannot be more specific with functional regulator’’ as ‘‘(1) The Board of Identification Program Requirement under Section
respect to the lists PPSIs must check in Governors of the Federal Reserve System; (2) The 326 of the USA Patriot Act, Customer Notice FAQ
Office of the Comptroller of the Currency; (3) The 2 (Apr. 28, 2005), available at https://
order to comply with this provision. Board of Directors of the Federal Deposit Insurance www.fincen.gov/resources/statutes-regulations/
Accordingly, PPSIs would not have an Corporation; (4) The Office of Thrift Supervision; guidance/interagency-interpretive-guidance-
affirmative duty under this proposed (5) The National Credit Union Administration; (6) customer-identification.
VerDate Sep<11>2014 21:08 Jun 18, 2026 Jkt 268001 PO 00000 Frm 00011 Fmt 4701 Sfmt 4702 E:\FR\FM\22JNP2.SGM 22JNP2
37244 Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules
requirements of this section. It also account, customer, or digital asset Willful violations of the proposed
provides that the Secretary, with the service provider? Are additional regulations set forth in this proposed
concurrence of the Federal functional definitions needed? rule, if finalized, may be subject to
regulator, may exempt any PPSI or any 3. Should FinCEN and the Agencies criminal penalties pursuant to 31 U.S.C.
type of account from the requirements retain ‘‘formal relationship’’ as part of 5322 and regulations promulgated in 31
of this section. the definition of account? What are the CFR chapter X. The statutory authority
In issuing such exemptions, the hallmarks of a ‘‘formal relationship’’ for criminal liability requires a mens rea
Federal functional regulator and the between a PPSI and a user? Should of willfulness as an element pursuant to
Secretary would consider whether the FinCEN and the Agencies provide 31 U.S.C. 5322(a) and 31 U.S.C. 5322(b).
exemption is consistent with the examples or attributes of a formal FinCEN’s existing regulation, 31 CFR
purposes of the BSA and with safety relationship in guidance? Would other 1010.840, that sets out criminal
and soundness, as well as in the public concepts be a better foundation for the penalties for violations of regulations
interest. It would also permit the account definition, such as a contractual promulgated in 31 CFR chapter X also
Federal functional regulator and or business relationship, and why? includes a mens rea of willfulness. The
Secretary to consider other necessary 4. Should the proposed rule be Department of Justice was consulted in
and appropriate factors. Given that the clarified or refined to account for drafting this statement.
GENIUS Act identifies the OCC, Board, situations where a customer’s only VIII. Regulatory Impact Analysis
FDIC, and NCUA as a primary Federal desired relationship with a PPSI is to
payment stablecoin regulator for PPSIs redeem a payment stablecoin? FinCEN and the Agencies have
under their respective jurisdictions, in 5. Should the regulatory text analyzed the proposed rule as required
this proposed rule, FinCEN and the explicitly discuss digital identity under E.O. 12866,86 E.O. 13563,87 E.O.
Agencies retain ‘‘Federal functional solutions or verifiable credentials? How 14192,88 the Regulatory Flexibility Act
regulator’’ consistent with its use in the could it best do so given the range of (RFA),89 the Unfunded Mandates
BSA CIP exemption provision, tools available on the market? Reform Act of 1995 (UMRA),90 the
providing the Secretary of the Treasury 6. What are the benefits and risks of Paperwork Reduction Act (PRA),91 the
and the Federal functional regulator using digital identity solutions or Riegle Community Development and
joint authority to issue an exemption.83 verifiable credentials as part of verifying Regulatory Improvement Act of 1994,92
customers’ identities? the Gramm-Leach-Bliley Act,93 and the
D. Proposed 31 CFR 1033.220(c)—Other 7. What is the expected likelihood Providing Accountability Through
Requirements Unaffected that a PPSI would rely on another PPSI’s Transparency Act of 2023.94
Proposed § 1033.220(c) clarifies that CIP or the CIP of another Federal The Office of Information and
nothing in § 1033.220 relieves a PPSI of functionally regulated financial Regulatory Affairs in the Office of
its obligation to comply with any other institution’s CIP? Management and Budget (OMB) has
provision of chapter X, including 8. What, if anything, could be determined this proposed rule to be a
provisions concerning information that changed to make the proposed rule ‘‘significant regulatory action’’ under
must be obtained, verified, or more conducive to industry innovation? section 3(f) of E.O. 12866. FinCEN and
maintained in connection with any Explain how any changes would the Agencies have included an Initial
account or transaction, including positively or negatively impact PPSIs Regulatory Flexibility Analysis (IRFA)
requirements to have the technological expected operations and illicit finance pursuant to the RFA as the proposed
capability to comply with and to risk to the U.S. financial system. rule may have a significant economic
comply with the terms of any lawful impact on a substantial number of
VII. Executive Order 14294 certain types of potentially affected
order.84
Section 5 of Executive Order 14294 small entities.95 Pursuant to analysis
E. Compliance Date directs that all future notices of 86 E.O. 12866, Regulatory Planning and Review,
FinCEN and the Agencies propose proposed rulemaking (NPRMs) and final 58 FR 51736 (Oct. 4, 1993).
that the rule would be effective 12 rules published in the Federal Register, 87 E.O. 13563, Improving Regulation and
months after issuance of the final rule the violation of which may constitute Regulatory Review, 76 FR 3821 (Jan. 21, 2011).
to allow sufficient time for PPSIs to criminal regulatory offenses, should 88 See E.O. 14192, Unleashing Prosperity Through
review and implement the requirements include a statement identifying that the Deregulation, 90 FR 9065 (Feb. 6, 2025); Office of
Management and Budget (OMB), M–25–20,
of the proposed rule. rule or proposed rule is a criminal Guidance Implementing Section 3 of Executive
VI. Request for Comments regulatory offense and the authorizing Order 14192, Titled ‘‘Unleashing Prosperity
statute.85 Executive Order 14294 directs Through Deregulation,’’ (Mar. 26, 2025), available at
FinCEN and the Agencies seek agencies to draft this statement in https://www.whitehouse.gov/wp-content/uploads/
comments on all aspects of the proposed 2025/02/M-25-20-Guidance-Implementing-Section-
consultation with the Department of 3-of-Executive-Order-14192-Titled-Unleashing-
rule and specifically seek comments on Justice. Prosperity-Through-Deregulation.pdf.
the following topics. For all responses, Executive Order 14294 further directs 89 5 U.S.C. 601 et seq.
commenters are encouraged to provide that the regulatory text of all NPRMs 90 2 U.S.C. 1532.
the basis for any conclusions drawn in and final rules with criminal 91 44 U.S.C. 3506(c)(2)(A), 3507(a)(1)(D).
92 12 U.S.C. 4802(a).
their comments. consequences published in the Federal 93 Public Law 106–102, section 722, 113 Stat.
1. Should any CIP requirement be Register after May 9, 2025 should 1338, 1471 (1999), 12 U.S.C. 4809.
extended to secondary market activity? explicitly state a mens rea requirement 94 5 U.S.C. 553(b)(4).
lotter on DSK8BHNXB4PROD with PROPOSALS2
If yes, in what circumstances? What for each element of a criminal regulatory 95 This economic expectation is sensitive to key
would be the benefits and drawbacks of offense, accompanied by citations to the assumptions about how potentially affected
doing so? relevant provisions of the authorizing financial institutions would respond to the
2. Should FinCEN and the Agencies proposed requirements. FinCEN requests comment
statute. on whether it would instead be more reasonable to
refine or clarify its definitions of certify that the proposed rule would not have a
85 E.O. 14294, Fighting Overcriminalization in significant economic impact on a substantial
83 See 31 U.S.C. 5318(l)(5).
Federal Regulations, 90 FR 20363, sec. 5 (May 14, number of small entities, given that the Agencies
84 See 12 U.S.C. 5903(a)(6)(B). 2025). are certifying for their respective entities.
VerDate Sep<11>2014 21:08 Jun 18, 2026 Jkt 268001 PO 00000 Frm 00012 Fmt 4701 Sfmt 4702 E:\FR\FM\22JNP2.SGM 22JNP2
Federal Register / Vol. 91, No. 118 / Monday, June 22, 2026 / Proposed Rules 37245
required by UMRA, FinCEN and the expectations of the proposed rule’s may ensue from an AML/CFT and CIP
Agencies conclude it is unlikely that the economic impact and burden.99 This is regime for PPSIs that is ineffective.
proposed rule, if implemented, would followed by pieces of additional and, in Because this NPRM is being issued
result in a novel annual expenditure of some cases, more specifically tailored pursuant to statutory obligations,110 the
more than $193 million by State, local, analysis as required by E.O.s 12866, necessity for FinCEN and the Agencies
and Tribal governments or by the 13563, and 14192; 100 the RFA; 101 the to independently identify and articulate
private sector.96 UMRA; 102 and the PRA.103 Requests for fundamental economic problems that
As described above,97 the proposed comments related to the RIA—regarding the proposed rule is intended to
rule would implement the GENIUS specific findings, assumptions, or address, as the basis for regulatory
Act’s directives to treat PPSIs as expectations, or with respect to the action,111 is attenuated because at best
financial institutions for purposes of the analysis in its entirety—can be found in this activity would complement the
BSA and to require such issuers to the final subsection.104 These requests problem identification already
maintain an ‘‘effective customer for comments have been previewed performed by Congress.112 Nevertheless,
identification program, including throughout the RIA. FinCEN and the Agencies have
identification and verification of the remained mindful of these animating
A. Assessment of Impact
identity of account holders.’’ 98 It considerations as well as the general
includes proposed requirements for a Consistent with best practices in social and economic costs that may
PPSI to establish and maintain a written