Permitted Payment Stablecoin Issuer Customer Identification Program (NPRM), 91 FR 37234, FR Doc 2026-12460 (Part 2 of 2)

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Bitcoin Research — Law, Regulation, Markets & Origins (2026)

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Fincen Wallet Rule

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Research, not advice. Part of the Bitcoin research archive (October 2026). Claims labelled unverified, contested or fringe are reported, not endorsed; statuses of bills and rules are as of the date checked. Government, court and patent records are public domain; the research notes are CC BY 4.0.

designed to ensure that a customer is able to view the
notice, or is otherwise given notice, before opening an account. For
example, if an account is opened electronically, such as through an
internet website, the issuer may provide notice electronically. Because
the notice is a standardized disclosure included with all applications,
FinCEN does not anticipate a per-customer burden, but rather a one-time
upfront cost to add the notice to application materials. FinCEN also
allows for an average one-hour ongoing annual burden to review and
update the notice if necessary. Because proposed Sec.
1033.220(a)(5)(iii) provides sample notice text, the expected burden of
preparing or revising the textual content of a PPSI's notice is
expected to take proportionately less time and effort than a PPSI's
other presentation-related business-specific decisions, such as
location (as banner text online, inline on a form, etc.) and
accessibility (including formatting, number of languages/translations
to provide, number of distinct locations, methods of messaging, and
platforms to place notice), among other attributes, which FinCEN and
the Agencies expect to be informed by a PPSI's approach to risk-based
and reasonably designed programs, generally.
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\167\ See proposed Sec. 1033.220(a)(5)(i).
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FinCEN estimates that the average annual cost for this activity
would be approximately $124.58 per PPSI, yielding an aggregate average
annual cost of approximately $6,229 for 50 expected PPSIs.\168\
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\168\ See Tables 9 and 10, infra section VIII.E.3.
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b. PPSI Customers
As presented above in section VIII.A.2.ii.b, the typical stablecoin
issuer that could be considered a payment stablecoin issuer would have
approximately 100 legal entity clients that it interacts with directly
and the population of unique prospective PPSI customers that could be
affected parties as U.S. legal persons is no more than 10,000. As
described in section VIII.A.2.ii.b, these non-individual persons, legal
entities, or other businesses belong to several categories, including
digital exchanges, specialized digital commodities traders, and other
types of investment- and securities-related businesses that, aside from
digital exchanges, would generally all be classified under NAICS code
523 (``Securities, Commodity Contracts, and Other Financial Investments
and Related Activities''). Accordingly, $102.54 was used to estimate
hourly costs to PPSI customers.\169\
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\169\ Based on a BLS mean industry hourly wage rate of $72.11.
BLS, Occupational Employment and Wage Statistics: Industry:
Securities, Commodity Contracts, and Other Financial Investments and
Related Activities (May 2024), available at https://data.bls.gov/oes/#/industry/523000. The BLS mean industry hourly wage rate of
$72.11 was scaled by a benefits factor of 1.42. See supra note 157.
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FinCEN estimates that PPSI customers, which are mostly financial
institutions engaged in trading a broad range of stablecoin products as
part of their investment portfolios, or exchanges seeking to provide
off-chain liquidity to retail customers for a similarly broad range of
stablecoin products, will likely initiate at least one new primary
market relationship each year, although this frequency may fluctuate.
In order to generate a conservative estimate, FinCEN and the Agencies
assume for purposes of this analysis that all primary market
participants would be required to provide this information at least
once during the course of business in a given year when interacting
with a new PPSI, while acknowledging significant uncertainty around
this estimate. FinCEN and the Agencies request public comment on this
assumption.
Assuming that 10,000 customers would spend, on average,
approximately one hour to collect, review, and transmit the required
customer identification information to its PPSI counterparties each
year, this would imply that costs to PPSI customers could be as much as
$1.03 million annually.
This estimate is highly conservative and likely to overestimate the
true incremental costs of the proposed CIP requirements to PPSI
customers for a number of reasons. For one, it assumes that all primary
market participants will be required to provide this information once
during the course of business in any given year as a function of
opening or attempting to newly open an account with a PPSI, which may
not be true for many customers. Additionally, these costs may be
included, or otherwise indistinguishable from customer costs
attributable to other business reasons to collect and provide
identifying information to a PPSI, including as necessary to satisfy a
PPSI's general AML/CFT program requirements. Some customers may be
required to submit information to identify themselves and support a
PPSI's required verification activities, and in some cases, submit
additional information about select key individuals associated with the
customer in order for a PPSI to satisfy its separate needs to meet
certain general AML/CFT program requirements and requirements unique to
its CIP. However, the collection and production of this information by
the customer is generally the same, or a highly overlapping, set of
activities. Therefore, the customer costs presented here should not be
treated as strictly additive to the customer costs articulated in
FinCEN's rulemaking that proposes general AML/CFT program requirements
for PPSIs.
c. Government Costs
To implement the proposed rule, FinCEN anticipates incurring
certain operating costs that would include approximately $0.98 million
in the year prior to the final rule's effective date, $1.35 million in
the first effective year the rule is in effect, and approximately $0.91
million per average subsequent year. These estimates include
anticipated expenses related to rulemaking and maintenance, stakeholder
outreach and informational support, compliance monitoring, and
potential enforcement activities as well as certain incremental
increases to pre-existing administrative and logistic expenses.
FinCEN acknowledges that this treatment of cost estimates
implicitly assumes that increased resources commensurate with any novel
operating costs would exist. If this assumption does not hold, then
operating costs associated with a rule may impose certain economic
costs on the public in the form of opportunity costs from the agency's
forgone alternative activities and those activities' attendant
benefits. Putting that into the context of this proposed rule, and
benchmarking against FinCEN's actual appropriated budget for fiscal
year 2025 ($190,193,000),\170\ the corresponding opportunity cost could
resemble forgoing up to 0.7 percent (0.5 percent) of current activities
in the first year (each subsequent year) in which a final rule was
effective. However, to the

[[Page 37259]]

extent that activities FinCEN would undertake as a function of the
proposed rule would functionally substitute for or otherwise replace
forgone activities, such an estimate likely overstates the potential
economic costs to FinCEN and, consequently, the public.
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\170\ FinCEN, Congressional Budget Justification FY 2026 (May
2025), available at https://home.treasury.gov/system/files/266/11.-FinCEN-FY-2026-CJ.pdf.
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These estimates do not include the potential costs borne by other
regulators or entities engaged in informational outreach, examinations,
or related supervisory actions of enforcement activities as a
consequence of the proposal. Consequently, the cost estimates here may
understate the burden of activities required to promote compliance with
the rules as proposed and the full scope of government costs.
5. Consideration of Policy Alternatives
FinCEN and the Agencies considered several alternatives to the
currently proposed version of the rule, but is limiting the
presentation here to considerations where public response may be most
useful. Some of the alternatives described below are scenarios that may
have resulted in reduced burdens for PPSIs but would do so at the
expense of forgone benefits or efficiency gains. Other alternatives
would have resulted in more significant burdens. For the reasons
described below, FinCEN and the Agencies decided not to propose any of
these alternatives. FinCEN and the Agencies invite comment on these
alternatives, and on any other alternatives that were not considered
here.
i. Alternative Definitions of ``Customer''
FinCEN and the Agencies considered adopting wider definitions of
``customer'' to encompass additional market activity, namely on the
secondary market. While the PPSI AML/CFT NPRM does propose some
requirements for PPSIs with regard to secondary market activity,\171\
this proposed rule limits customer information collection with regard
to the CIP to primary market customers (i.e., such as when a PPSI
engages in issuing, converting, redeeming, repurchasing, burning, and
reissuing payment stablecoins, as well as providing associated
services, such as providing custodial services).\172\
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\171\ See PPSI AML/CFT NPRM, supra note 4.
\172\ PPSIs may also engage in ``digital asset service
provider'' activities (as specified in the GENIUS Act), and
activities incidental thereto, that are authorized by a primary
Federal payment stablecoin regulator or State payment stablecoin
regulator, consistent with applicable law. Such activities include
exchanging and transferring digital assets. See 12 U.S.C. 5901(7),
5903(a)(7)(B).
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Collecting information on secondary market customers would have
significant benefits, but is also practically challenging. Almost all
(approximately 99 percent) of stablecoin transaction activity takes
place on the secondary market. In addition to most transaction volume
occurring in the secondary market, nearly all users of payment
stablecoin products are secondary market users, as most large payment
stablecoin issuers set significant financial requirements for primary
market participants that exclude retail traders.
Despite this being the location of significant activity, and
potentially significant risk, issuers have a limited ability to collect
customer information on the secondary market. The secondary market
includes both ``on-chain'' transactions (actual blockchain exchanges of
digital assets) and ``off-chain'' transactions (ledger/book
transactions made by third-party exchanges for which no evidence
appears on the blockchain). Market participants tend to use the two
types of secondary trading for different purposes. On-chain
transactions typically include digital asset transactions (such as
arbitrage trading or institutional flows) and a small portion of direct
payments for purposes like remittances across international borders.
Off-chain transactions are where most retail trading takes place. The
ratio of on-chain to off-chain transaction activity varies
significantly by product, but in the aggregate, a majority of
transaction volume for likely payment stablecoin products occurs off-
chain.\173\ Even for products where most transaction volume occurs on-
chain, a majority of the actual economic value for these products is
typically held in the wallets of exchange providers for off-chain
trading. For either type of activity, it is most often the case that no
customer information is collected in secondary market transactions by
the stablecoin issuer itself.
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\173\ Among the four largest payment stablecoin products
evaluated by FinCEN, about 35 percent of the total trading volume
was estimated to occur on-chain. However, this varied significantly
by product, and two of the products examined had significantly more
relative trading volume on-chain. The location of secondary market
activity depends heavily on the way in which the product is used and
how it is marketed.
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Many exchange operators facilitating off-chain activity collect
customer information in a manner similar to the information collected
by issuers for their primary market customers. However, exchanges
rarely share this information with issuers. For secondary market
customers trading stablecoins on the blockchain itself, identities are
often anonymous or pseudonymous. Blockchains are by nature
decentralized algorithms, so there is often no central collection point
at which identifying information is collected.
This being the case, FinCEN and the Agencies opted to confine the
definition of customer for the purpose of customer information
collection under the proposed rule to those undertaking primary market
transactions directly with the issuer.
ii. Alternative Information Requirements
Another alternative that FinCEN and the Agencies considered was
requiring customers to provide additional information beyond what is
required by the proposed rule. The proposed rule would require issuers
to collect, at a minimum, the name, address, and government-issued
identification number or incorporation document for legal entity
customers. For instance, FinCEN and the Agencies might have required
customers to provide any blockchain wallet addresses associated with a
legal entity, incorporation or tax documents, or certain identifying
financial information such as account numbers. However, FinCEN and the
Agencies opted not to require these items for several reasons. First,
many issuers already collect this additional information in the
ordinary course of business, and are best situated to determine what,
if any, additional information is necessary to make risk-based
decisions about a customer. Second, the absence of this information
does not exempt an issuer from the responsibility to assess the money
laundering and terrorist financing risks associated with a customer or
their transactions. Given this broader programmatic obligation, little
may be lost in letting it remain the issuer's prerogative to determine
when or whether such additional information is necessary.
iii. Size-Related Alternatives
FinCEN and the Agencies considered modifying the proposed rule's
requirements for small payment stablecoin issuers or establishing an
asset threshold for certain compliance obligations of payment
stablecoin issuers that are not bank subsidiaries. As discussed in more
detail in the IRFA (section VIII.C.1.ii.b), FinCEN utilizes a threshold
of $200 million in total reserve assets to identify small payment
stablecoin issuers that are not subsidiaries of insured depository
institutions. FinCEN and the Agencies considered using this threshold
as a tailoring benchmark, whereby issuers under the threshold would be
allowed

[[Page 37260]]

to apply for PPSI status under lessened CIP standards designed to
reduce compliance cost. However, FinCEN and the Agencies opted against
this alternative. Creating some category of PPSI subject to lessened
CIP requirements would conceivably result in the targeting of these
issuers by illicit actors seeking to circumvent regulatory scrutiny.
Further, FinCEN's analysis indicates that most technology services that
enable customer information collection as described here are highly
scalable, allowing small issuers to readily identify and employ more
cost-effective options.

B. Executive Orders 12866, 13563, and 14192

E.O. 12866 directs agencies to assess the costs and benefits of
available regulatory alternatives and, if regulation is necessary, to
select regulatory approaches that maximize net benefits (including
potential economic, environmental, and public health and safety
effects; distributive impacts; and equity). E.O. 13563 emphasizes the
importance of quantifying both costs and benefits, reducing costs,
harmonizing rules, and promoting flexibility. E.O. 13563 also
recognizes that some benefits are difficult to quantify and provides
that, where appropriate and permitted by law, agencies may consider and
discuss qualitatively values that are difficult or impossible to
quantify.
This proposed rule has been designated a ``significant regulatory
action'' under E.O. 12866; accordingly, it has been reviewed by OMB.
This action, if finalized, is expected to be considered an E.O.
14192 regulatory action.

C. Regulatory Flexibility Analysis

When an agency issues a proposed rulemaking, the RFA requires the
agency either to provide an IRFA with a proposed rule or certify that
the proposed rule would not have a significant economic impact on a
substantial number of small entities.
1. FinCEN IRFA
Because the proposed rule may have a significant economic impact on
a substantial number of certain types of PPSIs that may qualify as
small entities, FinCEN undertook the following analysis. In the event
that FinCEN has potentially overestimated the anticipated scope and
significance of the economic burden of the proposed rule on small
entities, and certification would instead be more appropriate, comments
to this effect--including studies, data, or other evidence--are
invited.
i. The Proposed Rule: Objectives, Description, and Legal Basis
The proposed rule would implement FinCEN's regulations that
prescribe the minimum requirements for CIPs for PPSIs as described
earlier in section V.
The legal basis for the proposed rule is the GENIUS Act.\174\ The
GENIUS Act creates a regulatory framework for payment stablecoins in
the United States.\175\ Under the GENIUS Act, it generally will be
unlawful for any person other than a PPSI to issue a payment stablecoin
in the United States.\176\ The GENIUS Act outlines certain reserve,
capital, liquidity, and risk management requirements for PPSIs and
tasks implementing those requirements to the Agencies, and, as
applicable, State payment stablecoin regulators.\177\
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\174\ See supra section II.
\175\ See generally 12 U.S.C. 5901-5916.
\176\ See 12 U.S.C. 5902(a), 5901(23) (defining ``permitted
payment stablecoin issuer''); see also 12 U.S.C. 5902(c)
(permitting, but not requiring, Treasury to issue regulations
providing limited safe harbors from 12 U.S.C. 5902(a)); 12 U.S.C.
5916.
\177\ 12 U.S.C. 5903(a)(4).
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The GENIUS Act requires that a PPSI ``be treated as a financial
institution for purposes of the Bank Secrecy Act, and as such, shall be
subject to all Federal laws applicable to financial institutions
located in the United States relating to economic sanctions, preventing
money laundering, customer identification, and due diligence.'' \178\
In addition to its general directive, the GENIUS Act specifies that a
PPSI's obligations must include maintenance of an effective CIP,
including identifying and verifying the PPSI's account holders.\179\
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\178\ 12 U.S.C. 5903(a)(5)(A).
\179\ 12 U.S.C. 5903(a)(5)(A)(v).
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\180\ 12 U.S.C. 5901(11). In the PPSI AML/CFT NPRM FinCEN
proposes to define this category in its regulations (see proposed
Sec. 1010.100(vvv)) using essentially the same language as the
statutory definition. See PPSI AML/CFT NPRM, supra note 4, at
section VI.C.1.xi.
\181\ 12 U.S.C. 5901(31). In the PPSI AML/CFT NPRM, FinCEN
proposes to define this category in its regulations (see CFR
1010.100(xxx)) using essentially the same language as the statutory
definition. See PPSI AML/CFT NPRM, supra note 4, at section
VI.C.1.xiii.
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a. Small PPSIs Considered by the Agencies
Analyses of the expected impact on PPSIs that would be subject to
their jurisdiction were conducted by each of the Agencies and are
appended with their respective certifications in sections VIII.C.2, 3,
4, and 5 below.
b. Other Potential Small PPSIs
The U.S. Small Business Administration (SBA) definition of ``small
entity'' as defined in 13 CFR 121.201 includes businesses, nonprofits,
and small government entities with fewer than 50,000 residents.\182\
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\182\ Some stablecoin issuers are organized as nonprofit
entities and are included in this count.
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Based on analysis of the distributional data separately analyzed by
FinCEN in the IRFA accompanying the PPSI AML/CFT NPRM, FinCEN
considered applying a functional definition of ``small entity'' for
purposes of this IRFA that would correspond closely to the 80th
percentile threshold, which was rounded to $200 million for convenience
in that proposed rule and is requesting comment on the appropriateness
of the $200 million threshold in both that NPRM and this proposed rule.
The proposed $200 million threshold would capture approximately 76
percent of current stablecoin issuers that meet the GENIUS Act
definitional criteria to be eligible for potential future PPSI status.
That is, of the pre-GENIUS Act population of 25 stablecoin issuers that
may be eligible to meet the GENIUS Act's definitional criteria for
future PPSIs (see Table 1), 19 had fewer than $200 million in total
circulating payment stablecoin product values. Together, these 76
percent of current

[[Page 37261]]

stablecoin issuers hold less than one percent of aggregate market
average total assets.
To examine the expected impact of the proposed rule on small
entities, FinCEN used two steps: the first step was to estimate the
total number of potential future small entities that would be affected
by the proposed rule, and the second step was to estimate the
significance of this impact on those entities.
In order to contextualize the relative significance of costs
associated with the proposed rule for small PPSIs, FinCEN used
estimates of total assets to estimate likely revenues for such issuers.
Stablecoin issuers generally derive revenue from investment returns on
their reserve holdings. As described in the GENIUS Act, PPSIs would be
permitted to invest reserve funds in several different types of asset
classes, including government-backed securities. Based on prevailing
interest rates, FinCEN assumed issuers would likely receive returns of
about five percent on invested funds. While actual returns may
fluctuate and fall below or above this estimate, this value represents
an benchmark for estimation purposes. To validate this assumption,
FinCEN examined actual revenue values as reported by current stablecoin
issuers and compiled in quarterly MSB Call Report data. While five
percent of total assets was generally within the same order of
magnitude to actual reported revenue, actual revenues often exceeded
five percent.
Returns in excess of prevailing rates for government-issued fixed
income securities can be due to several factors. First, stablecoin
issuers often ``over collateralize'' their products, meaning that they
hold larger reserve portfolios than are required to redeem every coin
at par value. This practice helps protect from market fluctuations and
affords issuers greater flexibility during times of financial stress.
In such cases, stablecoin issuers have reserve portfolios that are
larger than the circulating value of their products, leading to returns
in excess of those implied by multiplying their circulating value by
prevailing rates of return for common reserve investments. Stablecoin
issuers may also invest excess reserves in higher-yielding products or
loans whose rates of return exceed those of government-backed
securities. In addition to this, several other factors might lead to
larger returns. For example, stablecoin issuers may offer certain fee-
based services to customers, and may account for certain unrealized
gains as revenue, increasing reported revenue levels.
Bearing these factors in mind, FinCEN retained five percent of
total assets as a reasonable benchmark for revenue. This parameter was
chosen in order to retain an estimate of revenue that does not minimize
costs or possible fluctuations in returns. In other words, by using a
conservative but realistic estimate, FinCEN avoids underestimating the
relative impact of compliance costs associated with the proposed rule.
FinCEN requests comment on the appropriateness of using five percent of
total reserve assets as an estimate of these firms' revenue.
In section VIII.A.4.ii, FinCEN discussed the expected incremental
costs of compliance with the proposed rule for PPSIs. As that section
detailed, the incremental first-year costs of the proposed CIP
requirements for PPSIs not covered by the Agencies' analyses are
expected to be approximately $7,500 per PPSI in the first year, and
approximately $5,600 in the average subsequent year.

Table 5--CIP Costs as a Share of Modeled Annual Revenue
----------------------------------------------------------------------------------------------------------------
Percentage of small issuers for
which Year-1 CIP costs exceed:
Year Modeled CIP ---------------------------------
program cost 1% of modeled 3% of modeled
revenue revenue
----------------------------------------------------------------------------------------------------------------
1............................................................. $7,500 61 34
2+............................................................ 5,600 45 26
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At this time, FinCEN assesses that there is insufficient data to
forecast with meaningful precision the proportion of the total
population of potential future PPSIs that would resemble current
stablecoin issuers that would qualify as small entities or to consider
the potential economic significance of the proposed CIP requirements
differentially by type. FinCEN has therefore provided the analysis in
Table 5 for illustrative purposes only to facilitate an assessment of
how economically significant the proposed CIP requirements might be if
future small PPSIs were comparable to current stablecoin issuers whose
products meet the GENIUS Act's definitional criteria for a future
payment stablecoin. Comments and data are invited to assist analyzing
the potential effects of the proposed CIP requirements on small PPSIs,
particularly those that would not be the subsidiaries of insured
depository institutions.
c. Small Business Customers of PPSIs
In addition to these entities, FinCEN expect that the proposed
rule, if adopted, to have impacts on the primary market customers of
PPSIs. Many of these entities, which include digital asset exchanges,
specialized commodities traders, and other investment firms, are small
businesses. Using the data described earlier,\183\ FinCEN estimates
that there are approximately 300,000 primary market customers that
interact directly with stablecoin issuers. However, FinCEN estimates
that a substantial portion of these may be affiliates of a single
counterparty or associated with non-U.S. entities. FinCEN estimates
that the number of affected U.S. businesses is no more than 10,000.
These businesses belong to several categories, including digital asset
exchanges, specialized digital commodities traders, and other types of
investment- and securities-related businesses. Aside from digital asset
exchanges, FinCEN expects that nearly all of these firms would be part
of the NAICS classifications under industry code 523 (``Securities,
Commodity Contracts, and Other Financial Investments and Related
Activities'').
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\183\ See supra section VIII.A.2.ii.b.

[[Page 37262]]

Table 6--Description of PPSI Customer Small Entities
----------------------------------------------------------------------------------------------------------------
Approximate SBA small- Percentage Average annual
Primary market customer type number of NAICS code business considered small revenue of small
customers threshold \a\ entities \b\
----------------------------------------------------------------------------------------------------------------
Other Investment Firms....... 10,000 523 $47 million..... 97.7% (about $1.55 million.
9,770 firms).
Digital Asset Exchanges \c\.. 300 523210 $47 million..... 70% (about 210 $5.85 million.
firms).
----------------------------------------------------------------------------------------------------------------
\a\ To estimate the number of small entities in NAICS code 523, FinCEN used the U.S. Census 2022 Statistics of
U.S. Businesses Data by Enterprise Receipts Size. U.S. Census, 2022 Statistics of U.S. Businesses Data by
Enterprise Receipts Size, available at https://www.census.gov/data/tables/2022/econ/susb/2022-susb-annual.html. FinCEN calculated the proportion of small businesses in NAICS code 523 with less than $50 million
in annual receipts (the closest available threshold). For Digital Asset Exchanges, FinCEN used internal data.
\b\ Revenue data for NAICS code 523 and Digital Asset Exchanges was collected from the U.S. Census 2022
Statistics of U.S. Businesses Data by Enterprise Receipts Size and internal data, respectively.
\c\ Note, these 300 customers are a subset of the 10,000 customers captured under NAICS code 523.

While a substantial number of these firms would be required to
provide customer information to the PPSIs they wish to engage in direct
transactions with, the cost of providing this information is expected
to be de minimis relative to the average revenue of these firms.\184\
Therefore, while a substantial number of businesses may be providing
information to PPSIs, FinCEN does not contemplate that this requirement
would constitute a significant effect when considered in relation to
their overall revenue.
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\184\ This cost is estimated to be less than $200 per firm
annually, on average. See section VIII.A.4.ii.b.
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iii. Other Matters: Duplicate, Overlapping, Conflicting, and
Alternative Requirements
FinCEN is unaware of any existing Federal regulations that would
overlap or conflict with the proposed rule. As discussed in section
III, in a related, complementary rulemaking FinCEN is proposing to
apply additional GENIUS Act and BSA obligations on PPSIs, including,
for example, AML/CFT program requirements and suspicious activity
reporting requirements. This rulemaking deals exclusively with a CIP
requirement, which is not contained within the related, complementary
rulemaking.
Additionally, FinCEN has considered certain alternatives to the
proposed rule that take into consideration the expected costs and
potential benefits to small entities. As discussed in greater detail in
section VIII.A.5.iii, FinCEN considered modifying the requirements for
small entities. As discussed in that section, FinCEN opted against this
exclusion for several reasons. By creating some category of PPSI for
small issuers that would be subject to lessened CIP requirements could
conceivably lead to illicit actors who seek to circumvent regulatory
scrutiny targeting these small issuers. Additionally, FinCEN analysis
indicates that most technology services that enable customer
information collection as described here are highly scalable, allowing
small issuers to readily identify and employ more cost-effective
options.
In addition, as discussed in greater detail in section VIII.A.5.ii,
FinCEN also considered adopting additional information reporting
requirements for new customers. Because some primary market customers
of potential PPSIs may themselves be small businesses, such a
requirement that expanded reporting requirements beyond what
information is already provided in the ordinary course of business may
have presented an incremental cost for some number of these small
entities. However, as discussed in section VIII.A.5.ii, FinCEN opted
not to augment these requirements. Many issuers already collect this
additional information in the course of business, and are best situated
to determine what, if any, additional information is necessary to
support overall AML/CFT goals. As a result, FinCEN expect no
incremental cost burden to small entity customers of potential PPSIs as
a result of the requirements in the proposed rule.
2. OCC Certification
The proposal will apply to entities overseen by the OCC. The OCC
currently supervises 997 institutions (national banks, Federal savings
associations, and branches or agencies of foreign banks),\185\ of which
approximately 609 are small entities under the RFA.\186\ In general,
the OCC classifies the economic impact on an individual small entity as
significant if the total estimated impact in one year is greater than
five percent of the small entity's total annual salaries and benefits
or greater than 2.5 percent of the small entity's total non-interest
expense. Furthermore, the OCC considers five percent or more of OCC-
supervised small entities to be a substantial number, and at present,
30 OCC-supervised small entities would constitute a substantial number.
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\185\ Financial Institution Data Retrieval System Data, accessed
February 20, 2026.
\186\ The OCC estimated the number of small entities based on
the SBA's size thresholds for commercial banks and savings
institutions, and trust companies, which are $850 million and $47
million, respectively. Consistent with the General Principles of
Affiliation 13 CFR 121.103(a), the OCC counted the assets of
affiliated financial institutions when determining if it should
classify an OCC-supervised institution as a small entity. The OCC
used December 31, 2024, to determine size because a ``financial
institution's assets are determined by averaging the assets reported
on its four quarterly financial statements for the preceding year.''
See footnote 8 of the SBA, Table of Small Business Size Standards
(Mar. 17, 2023), available at https://www.sba.gov/document/support-table-size-standards.
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In the OCC's NPRM published March 2, 2026, the OCC stated, ``Given
that all current OCC banks that issue stablecoins generally have
issuance of over $1 billion and are not considered small entities and
the lack of small entity stablecoin issuers, the OCC will need to wait
for more information to determine whether it is likely that there will
be a significant number of small entities affected by the proposed
rule. At this time, the OCC does not expect that the proposed rule
would have a significant impact on a substantial number of small
entities under the RFA.'' \187\
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\187\ OCC, Implementing the Guiding and Establishing National
Innovation for U.S. Stablecoins Act for the Issuance of Stablecoins
by Entities Subject to the Jurisdiction of the Office of the
Comptroller of the Currency, 91 FR 10202 (Mar. 2, 2026).
---------------------------------------------------------------------------

The OCC continues to expect that small entities will not be the
initial adopters of this technology because of the compliance
infrastructure and capital necessary to support stablecoin issuance. As
such, the OCC anticipates that future FQPSIs would not be small
entities as defined by the SBA (currently $850 million in assets for
financial entities). Hence, the proposed rule would not have a
significant impact on a substantial number of small entities

[[Page 37263]]

under the OCC's purview for purposes of the RFA.
3. Board IRFA
The Board is providing an initial regulatory flexibility analysis
with respect to this proposal. The RFA requires an agency to consider
whether the rules it proposes will have a significant economic impact
on a substantial number of small entities. Under regulations issued by
the SBA, a ``small'' entity includes a depository institution, bank
holding company, or savings and loan holding company with total assets
of $850 million or less.\188\ For purposes of this section, any
reference to ``small'' entities is a reference to this definition.
---------------------------------------------------------------------------

\188\ See 13 CFR 121.201. Consistent with the SBA's General
Principles of Affiliation, the Board includes the assets of all
domestic and foreign affiliates toward the applicable size threshold
when determining whether to classify a particular entity as a small
entity. See 13 CFR 121.103.
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In connection with a proposed rule, the RFA requires an agency to
prepare an IRFA describing the impact of the rule on small entities,
unless the head of the agency certifies that the proposed rule, if
promulgated, will not have a significant economic impact on a
substantial number of small entities and publishes such certification
along with a statement providing the factual basis for such
certification in the Federal Register. An IRFA must contain (1) a
description of the reasons why action by the agency is being
considered; (2) a succinct statement of the objectives of, and legal
basis for, the proposed rule; (3) a description of, and, where
feasible, an estimate of the number of small entities to which the
proposed rule will apply; (4) a description of the projected reporting,
recordkeeping, and other compliance requirements of the proposed rule,
including an estimate of the classes of small entities that will be
subject to the requirement and the type of professional skills
necessary for preparation of the report or record; (5) an
identification, to the extent practicable, of all relevant Federal
rules which may duplicate, overlap with, or conflict with the proposed
rule; and (6) a description of any significant alternatives to the
proposed rule which accomplish its stated objectives and minimize any
significant economic impact of the proposed rule on small
entities.\189\
---------------------------------------------------------------------------

\189\ 5 U.S.C. 603(b)-(c).
---------------------------------------------------------------------------

The Board has considered the potential impact of the proposed rule
on small entities in accordance with the RFA. Based on its analysis and
for the reasons stated below, the Board believes that this proposed
rule will not have a significant economic impact on a substantial
number of small entities. Nevertheless, the Board is publishing and
inviting comment on this initial regulatory flexibility analysis.
i. Reasons Why Action Is Being Considered by the Board
As explained above, this proposal implements the GENIUS Act's
directives to treat PPSIs as financial institutions for purposes of the
BSA and to require such issuers to maintain an ``effective customer
identification program, including identification and verification of
account holders.'' \190\ The proposed rule would subject PPSIs to CIP
requirements that are comparable to existing CIP requirements for other
financial institutions, such as banks, broker-dealers, mutual funds,
and FCMs and IBCs. It also would require a PPSI to tailor its CIP to
that PPSI's size and type of business, as well as take into
consideration the PPSI's risk based on its unique business--including
the types of accounts it has, how those accounts are opened, and the
identifying information available.
---------------------------------------------------------------------------

\190\ See 12 U.S.C. 5903(a)(5)(A)(v); see also 31 U.S.C.
5318(l).
---------------------------------------------------------------------------

ii. The Objectives of, and Legal Basis for, the Proposal
The proposed rule would prescribe the minimum requirements for CIPs
for PPSIs as described earlier in section V.
Section 4(a)(5)(A) of the GENIUS Act (12 U.S.C. 5903(a)(5)(A))
requires that a PPSI ``be treated as a financial institution for
purposes of the Bank Secrecy Act, and as such, shall be subject to all
Federal laws applicable to financial institutions located in the United
States relating to economic sanctions, preventing money laundering,
customer identification, and due diligence.'' \191\ Additionally,
section 4(a)(5)(A) specifies that a PPSI must maintain an effective
CIP, and must identify and verify the PPSI's account holders.\192\
---------------------------------------------------------------------------

\191\ 12 U.S.C. 5903(a)(5)(A); see also 31 U.S.C. 5318(l).
\192\ 12 U.S.C. 5903(a)(5)(A)(v).
---------------------------------------------------------------------------

The proposed rule would implement the GENIUS Act by proposing a
requirement for PPSIs to maintain an effective CIP, including
identification and verification of account holders. The proposed rule
includes requirements related to documenting customer verification
procedures, requisite customer information, required recordkeeping,
comparison with government lists, and customer notification.
iii. Description of the Compliance Requirements of the Proposal and
Estimate of the Number of Small Entities
The proposed rule would implement the GENIUS Act by proposing a
requirement for PPSIs to maintain an effective CIP, including
identification and verification of account holders. The proposed rule
includes requirements for Board-supervised PPSIs of all sizes related
to documenting customer verification procedures, requisite customer
information, required recordkeeping, comparison with government lists,
and customer notification. The compliance burdens are described in more
detail in section VIII.A.4.ii above.
This NPRM is being issued jointly by FinCEN, along with the Board
and other Agencies as applied to the PPSIs that each Agency supervises.
The expected impact on PPSIs that are subject to the Board's
jurisdiction is analyzed below.
The proposed rule would apply to (i) subsidiaries of insured State
member banks that have been approved by the Board to issue payment
stablecoins and (ii) State-qualified PPSIs that are uninsured State-
chartered depository institutions that have transitioned to the Board's
regulatory framework under section 4(d) of the GENIUS Act (12 U.S.C.
5903(d)). By definition, the proposed rule would only apply to a State-
qualified PPSIs that have an outstanding issuance value of more than
$10 billion, and accordingly, would not be considered small for the
purposes of this IRFA. This analysis therefore focuses only on Board-
supervised PPSIs that are subsidiaries of State member banks. The Board
is not aware of any method of determining the identity, industry, or
size of Board-supervised PPSIs that are subsidiaries of State member
banks, given that there are no such entities at this time and it is
difficult to predict how this market will develop. Further, SBA
regulations do not provide small entity thresholds specific to PPSIs.
As a result, this section of the IRFA discusses the size of the parent
State member banks of such PPSIs. The Board believes this approach is
appropriate because, under the GENIUS Act, an insured State member bank
must have ``control'' of a Board-supervised PPSI.\193\
---------------------------------------------------------------------------

\193\ The GENIUS Act defines the term ``subsidiary'' by
reference to the definition of ``subsidiary'' in the Federal Deposit
Insurance Act, which states that a subsidiary includes any company
which is owned or controlled directly or indirectly by another
company. See 12 U.S.C. 5901(32) (``The term ``subsidiary'' has the
meaning given that term in [12 U.S.C. 1813].''); see also 12 U.S.C.
1813(w)(4). In the Federal Deposit Insurance Act, the term
``control'' is defined by reference to the Bank Holding Company Act.
12 U.S.C. 1813(w)(5). The Board's Regulation Y sets out the Board's
presumptions of control and noncontrol under the controlling
influence prong of the Bank Holding Company Act definition of
``control.'' See 12 CFR part 225, subpart D.

---------------------------------------------------------------------------

[[Page 37264]]

As of December 31, 2025, there were 703 insured State member
banks.\194\ Of those institutions, 439 are considered small for the
purposes of RFA.\195\ For this analysis, the Board estimates that
between five and ten insured State member banks may, with the Board's
permission, form a Board-supervised PPSI subsidiary in the first few
years after the finalization of the proposed rule. Given the early
stages of the payment stablecoin market, this range accounts for
significant uncertainty regarding the volume of future participants.
The population of Board-supervised PPSIs that are subsidiaries of State
member banks could be higher or lower depending on market demand,
strategic operational choices of insured State member banks and other
institutions eligible to become PPSIs, and future developments in the
digital landscape. By utilizing this range, the Board aims to establish
an estimate that serves as the basis for evaluating the economic
effects of the proposed rule, while acknowledging the inherent
uncertainty resulting from a lack of historical precedent. The Board
expects that the insured State member banks that are most likely to
seek to form a Board-supervised PPSI subsidiary initially will be
larger institutions with the compliance infrastructure and capital
necessary to support a new business line to issue payment stablecoins.
As such, the Board anticipates that most, if not all, insured State
member banks with Board-supervised PPSIs would not be small entities as
defined by the SBA. Even assuming the unlikely scenario that all, i.e.,
the upper-bound number of ten insured State member banks, would be
small and that all ten insured State member banks would be
significantly impacted by the proposed rule, these impacted entities
would comprise a very small percentage of small insured State member
banks.
---------------------------------------------------------------------------

\194\ Call Report Data, December 31, 2025.
\195\ Call Report Data, December 31, 2025.
---------------------------------------------------------------------------

iv. Consideration of Duplicative, Overlapping, or Conflicting Rules and
Significant Alternatives to the Proposal
The Board has not identified any Federal statutes or regulations
that would duplicate, overlap, or conflict with the proposal. The Board
is seeking comment on certain potential alternative approaches to
discrete aspects of the final rule, as discussed elsewhere in this
proposal, most of which would not significantly change the estimated
economic impact of the proposed rule.
vi. Conclusion
Based on its analysis and for the reasons stated above, the Board
believes that the proposed rule is unlikely to have a significant
economic impact on a substantial number of small entities. The Board
welcomes comment on all aspects of its analysis. In particular, the
Board requests that commenters describe the nature of any impact on
small entities and provide empirical data to illustrate and support the
extent of the impact. Additionally, the Board requests that commenters
describe the number of small entities under the RFA and the impact on
small entities.
4. FDIC Certification
The RFA generally requires an agency, in connection with a proposed
rule, to prepare and make available for public comment an initial
regulatory flexibility analysis that describes the impact of the
proposed rule on small entities.\196\ However, an initial regulatory
flexibility analysis is not required if the agency certifies that the
proposed rule would not, if promulgated, have a significant economic
impact on a substantial number of small entities. The SBA has defined
``small entities'' to include banking organizations with total assets
of less than or equal to $850 million.\197\
---------------------------------------------------------------------------

\196\ 5 U.S.C. 601 et seq.
\197\ The SBA defines a small banking organization as having
$850 million or less in assets and determines an organization's
assets by averaging the assets reported on its four quarterly
financial statements for the preceding year. See 13 CFR 121.201 (as
amended by 87 FR 69118, effective December 19, 2022). Following
these regulations, the FDIC uses an FDIC-supervised institution's
affiliated and acquired assets, averaged over the preceding four
quarters, to determine whether the FDIC-supervised institution is
``small'' for the purposes of the RFA.
---------------------------------------------------------------------------

Generally, the FDIC considers a significant economic impact to be a
quantified effect in excess of five percent of total annual salaries
and benefits or 2.5 percent of total non-interest expenses. The FDIC
believes that effects in excess of one or more of these thresholds
typically represent significant economic impacts for FDIC-insured
institutions.
The FDIC estimates the effects of the required mandates of the
proposed rule on small FDIC-supervised entities. For the purposes of
this analysis, the FDIC utilizes a pre-statutory baseline under which
the GENIUS Act is considered unenacted. Under this baseline, no formal
federal framework exists to coordinate and homogenize the issuance of
payment stablecoins, leaving the market to operate under a fragmented
regulatory framework and limited federal guidance.
As previously discussed, the proposed rule would apply to all
PPSIs, including FDIC-supervised PPSIs, which would be subsidiaries of
FDIC-supervised institutions.\198\ As of the quarter ending September
30, 2025, there were 2,772 insured State nonmember banks and State
savings associations. Of those institutions, 2,064 are considered
``small'' for the purposes of RFA.\199\
---------------------------------------------------------------------------

\198\ See 12 U.S.C. 5903(a)(7).
\199\ Federal Financial Institutions Examination Council Reports
of Condition and Income (Call Reports), September 30, 2025.
---------------------------------------------------------------------------

The FDIC recognizes considerable uncertainty regarding the number
of FDIC-supervised PPSIs that would emerge under the proposed
framework. For the purposes of this analysis, the FDIC estimates that
the number of FDIC-supervised PPSIs would likely range between five and
30 in the first few years after the enactment of the proposed rule.
Given the early stages of the payment stablecoin market, this range
accounts for significant uncertainty regarding the volume of future
participants. The population of FDIC-supervised PPSIs under the
proposed rule could be higher or lower depending on market demand,
strategic operational choices of eligible institutions, and future
developments in the digital landscape. By utilizing this range, the
FDIC aims to establish an estimate that serves as the basis for
evaluating the economic effects of the proposed rule, while
acknowledging the inherent uncertainty resulting from a lack of
historical precedent.
Because an FDIC-supervised PPSI must be a subsidiary of an IDI, the
FDIC expects that the initial adopters of this technology would likely
be larger institutions with the compliance infrastructure and capital
necessary to support stablecoin issuance. As such, the FDIC anticipates
that most, if not all, future PPSIs would not be small entities as
defined by the SBA. Therefore, the FDIC believes the proposed rule is
unlikely to have a significant economic impact on a substantial number
of small entities.
However, given the lack of historical precedent and the evolving
nature of the payment stablecoin market, the FDIC conservatively
assumes that, for the purpose of this analysis, all the entities
falling within the previously discussed

[[Page 37265]]

scope of five to 30 potential FDIC-supervised PPSIs could be small
entities. By adopting this conservative assumption, the FDIC aims to
provide a comprehensive estimate of the potential economic impact on
small entities.
In the unlikely scenario that all, i.e., the upper-bound number of
30 entities, would be small, the estimated impact on each small entity
would be a de minimis amount. Even if all 30 entities would instead be
significantly impacted by the proposed rule, the FDIC does not consider
30 entities to be a substantial number of small entities.
In light of the foregoing, the FDIC certifies that the proposed
rule would not have a significant economic impact on a substantial
number of small entities. Accordingly, an initial regulatory
flexibility analysis is not required.
The FDIC invites comments on all aspects of the supporting
information provided in this RFA section. The FDIC is particularly
interested in comments on any significant effects on small entities
that the agency has not identified.
5. NCUA Certification
As noted in the FDIC certification, under the RFA an initial
regulatory analysis is not required if the promulgating agency
certifies the proposed rule (if enacted) would not have a ``significant
economic impact'' on a substantial number of ``small entities.'' The
NCUA certifies the economic burden of the CIP rule--both in terms of
likely expenses borne by individual small credit unions and the number
of small credit unions facing significant expenses--falls short of the
RFA materiality threshold.
Under the GENIUS Act, federally insured credit unions (FICUs)
cannot become PPSIs. The credit-union analogue for a bank subsidiary--
at least for purposes of this act--is the credit union service
organization (CUSO).\200\ Currently, the NCUA does not charter, insure,
or collect call-report type data from CUSOs, so there is no formal
definition of small for RFA purposes. Following the FDIC, the NCUA
relies on its traditional approach to RFA analysis by examining the
impact of the CIP rule on FICUs with fewer than $100 million in
assets.\201\ As of September 30, 2025, the NCUA supervised 4,331 FICUs;
of these, 2,553 (or 58.9 percent) qualified as small entities. Compared
with commercial banks, credit unions are quite small. Indeed, the
industry median asset size (again 2025:Q3) was $63.63 million--roughly
one-sixth of the median asset size in the banking industry. Put another
way, 3,813 FICUs (88.0 percent of all FICUs) would qualify as small
under the FDIC RFA threshold (fewer than $850 million).
---------------------------------------------------------------------------

\200\ A CUSO is an entity that provides various products/
services to credit unions and their members. The goals are to (i)
enable credit unions to enjoy economies of scale and (ii) expand the
range of product/service offerings for credit-union members. These
organizations are typically owned by one or more credit unions.
Examples of CUSO products/services include loan origination,
operational support, and IT services.
\201\ Using this traditional approach implicitly assumes (for
analytical purposes only) CUSOs are a formal part of the credit
unions they support. The NCUA Board established the definition of
``small'' (fewer than $100 million in assets) via IRPS 80 FR 57512
in 2015.
---------------------------------------------------------------------------

Predicting the number of PPSIs in the credit-union sector is
difficult because: (i) CUSOs or credit unions have never offered a
product quite like stablecoin; and (ii) as noted, the NCUA--with
extremely limited authority over CUSOs (as third-party vendors)--has
little-to-no anecdotal or formal data to make a forecast. That said,
the National Association of Credit Union Service Organizations (NACUSO)
reported in its 2020 CUSO Market Report that credit unions holding
between $100 and $500 million in assets are by far the largest block of
CUSO customers. Moreover, the credit-union sector has historically been
conservative in its approach to offering products/services with novel
risk dimensions. When such products/services are offered, large credit
unions have been in the forefront. In short, qualitative and
quantitative data suggest the number of PPSIs in the credit-union
sector should be well below that in the banking industry. Specifically,
the NCUA expects the actual number to fall between zero and 10, with
five being a reasonable point estimate. Five represents 0.2 percent of
the total number of small FICUs.
As for the number of small FICUs potentially facing a
``significant'' burden, applying the FBA materiality threshold of
either 5 percent of annual compensation expense or 2.5 percent of total
non-interest expense is problematic because small credit unions: (1)
tend to rely heavily on volunteers; \202\ and (2) often enjoy free
office space provide provided by a sponsor. Under the FBA compensation
threshold (5 percent), for example, 1,274 small FICUs--49.9 percent of
those holding fewer than $100 million--would face a significant burden.
Similarly, under the FBA non-interest expense threshold (2.5 percent),
1,226 would face an undue burden. At first, both numbers appear to
qualify as ``substantial.'' But, again, it is important to remember
small credit unions typically have relatively simple operations with
plain vanilla product/service offerings. The CUSOs serving these credit
unions would be extremely unlikely to become PPSIs even if the CIP
regulatory burden were zero dollars. So, to arrive at an estimate of
small FICUs potentially facing an undue burden, recall the estimate for
PPSIs industrywide offered above--zero to 10. Now, assume
(unrealistically) the actual number is 10, that all held fewer than
$100 million in assets, and all faced marginal compliance expenses
exceeding 5 percent of compensation expense or 2.5 percent of non-
interest expense. Under these conservative assumptions, only 0.4
percent of small FICUs would face an undue burden. In short, the
relatively modest size and simple operations of ``small'' FICUs--both
absolutely and compared with commercial banks--suggest few would be
interested in stablecoins even if there were no regulatory burden.
Accordingly, it is reasonable to conclude the CIP rule will not have a
significant economic impact on a substantial number of small FICUs.
---------------------------------------------------------------------------

\202\ For example, the median number of paid full-time
equivalent employees for a small FICU is five.
---------------------------------------------------------------------------

D. Unfunded Mandates Reform Act

The UMRA requires that an agency prepare a statement before
promulgating a rule that may result in expenditure by the state, local,
and Tribal governments, in the aggregate, or by the private sector, of
$193 million or more in any one year ($100 million in 1995, adjusted
for inflation).\203\ Section 202 of UMRA also requires an agency to
identify and consider a reasonable number of regulatory alternatives
before promulgating a rule.
---------------------------------------------------------------------------

\203\ The U.S. Bureau of Economic Analysis reports the annual
value of the gross domestic product implicit price deflator for
calendar year 1995 (the year UMRA was enacted) as 66.939, and as
128.974 for calendar year 2025 (the most recent available). Thus,
the inflation-adjusted estimate for $100 million is 128.974 / 66.939
x $100 million, or $192.7 million. See U.S. Bureau of Economic
Analysis, Table 1.1.9. Implicit Price Deflators for Gross Domestic
Product, available at https://apps.bea.gov/iTable/?reqid=19&step=3&isuri=1&1921=survey&1903=13#eyJhcHBpZCI6MTksInN0ZXBzIjpbMSwyLDMsM10sImRhdGEiOltbIk5JUEFfVGFibGVfTGlzdCIsIjEzIl0sWyJDYXRlZ29yaWVzIiwiU3VydmV5Il0sWyJGaXJzdF9ZZWFyIiwiMTk5NSJdLFsiTGFzdF9ZZWFyIiwiMjAyNSJdLFsiU2NhbGUiLCIwIl0sWyJTZXJpZXMiLCJBIl1dfQ==.
---------------------------------------------------------------------------

As discussed above,\204\ FinCEN and the Agencies have not estimated
the number of potential future SQPSIs given the inherently speculative
nature of such an exercise at this time. Consequently, FinCEN and the
Agencies

[[Page 37266]]

are unable to assess the potential burden to state, local, and Tribal
governments of the proposed CIP rule and are, at this time, not
expecting any additional expenditures to these parties as an
incremental cost of the proposed rule. However, FinCEN and the
Agencies' expectation that this rulemaking will not cause material
changes in State expenditures, in particular, should be understood as
relating only to the impact of this rulemaking and not to the impact of
the GENIUS Act writ large. The GENIUS Act envisions an active role for
the states in the regulation of PPSIs as a complement to Federal
regulation.
---------------------------------------------------------------------------

\204\ See supra sections VIII.A.2.ii.a.
---------------------------------------------------------------------------

While the analyses above \205\ and below,\206\ indicate that the
proposed rule is not expected to impose incremental novel expenditures
on the private sector of $193 million or more, and hence that
additional economic analysis pursuant to UMRA requirements is not
strictly necessary, FinCEN and the Agencies believe that the preceding
assessment of impact, generally, and consideration of policy
alternatives, specifically, would satisfy the UMRA's analytical
requirements. FinCEN and the Agencies invite public comment on any
additional factors that, if considered, would materially alter the
conclusions of this assessment.
---------------------------------------------------------------------------

\205\ See supra sections VIII.A through C.
\206\ See infra section VIII.E.
---------------------------------------------------------------------------

E. Paperwork Reduction Act

The recordkeeping requirements in the proposed rule, which qualify
as ``collections of information'' under the PRA, will be submitted to
OMB for review in accordance with the PRA.\207\ Under the PRA, an
agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless it displays a valid
control number assigned by OMB.\208\ Written comments and
recommendations for the proposed information collection can be
submitted by visiting https://www.reginfo.gov/public/do/PRAMain. Find
this particular document by selecting ``Currently Under Review--Open
for Public Comments'' or by using the search function. Comments are
welcome and must be received by August 21, 2026.
---------------------------------------------------------------------------

\207\ See 44 U.S.C. 3506(c)(2).
\208\ See 44 U.S.C. 3507(a)(3).
---------------------------------------------------------------------------

In accordance with requirements of the PRA, 44 U.S.C.
3506(c)(2)(A), and its implementing regulations, 5 CFR part 1320, the
following information concerning the collection of information as it
relates to the new CIP requirements for covered PPSIs is presented to
assist those persons wishing to comment on the information collections.
1. Description of Affected Financial Institutions and OMB Control
Numbers
OMB Control Number(s): [1506-XXXX].
Description of Affected Entities: Only those covered financial
institutions defined in section 31 CFR 1010.100(t)(11) (i.e., PPSIs)
would be affected.
Estimated Number of Respondents: 50 PPSIs.
FinCEN estimates an average annual population of approximately 50
PPSIs in the first three years, comprised of approximately 20 non-IDI
subsidiary PPSIs and 30 IDI-subsidiary PPSIs.\209\ FinCEN expects these
entities to each have an average of 1,000 customers, with an average of
650 new customers annually.\210\
---------------------------------------------------------------------------

\209\ See supra section VIII.A.2.ii.a.
\210\ See supra section VIII.A.2.ii.b.
---------------------------------------------------------------------------

As this is a developing market, FinCEN and the Agencies acknowledge
significant uncertainty regarding the number of potential PPSIs.
However, as discussed earlier, FinCEN and the Agencies estimate that
IDI-subsidiary PPSIs would have reduced CIP-related expenses due to
their position within a parent's existing CIP program.
2. Estimated Annual Burden Hours
As described in section VIII.A.4.ii.a, each PPSI is expected to
incur recordkeeping burdens associated with the proposed CIP
obligations. FinCEN and the Agencies have identified five main cost
categories associated with the various incremental recurring costs
expected to be incurred by PPSIs to comply with CIP requirements. These
cost categories are: (1) establishing and maintaining a written CIP;
(2) obtaining and verifying customer identification information, (3)
recordkeeping; (4) consulting government lists, and (5) customer
notification.
i. Establishing and Maintaining a Written CIP
PPSIs subject to this rule would have to establish a CIP in
accordance with the proposed rule. FinCEN estimates the average cost
for a PPSI to establish and maintain a written CIP as described in
section VIII.A.4.ii.a.1 to be between approximately 20 to 30 hours per
firm (with an average of 25 hours per firm) in the first year for non-
IDI subsidiary PPSIs, and about ten to 15 hours per firm (with an
average of approximately 12 hours per firm) in the first year for IDI-
subsidiary PPSIs. For both PPSI types, the average burden of these
activities is expected to decrease to approximately ten hours per PPSI,
irrespective of type, in each subsequent year. This activity would
involve tasks such as reviewing the requirements of the rule,
establishing and documenting the program, and updating the CIP when
necessary.
ii. Obtaining and Verifying Customer Identification Information
The proposed rule would require PPSIs to collect and verify certain
information from each customer.\211\ Because the proposal exempts
existing primary market customers from information collection
requirements, the agencies estimate information collection costs for
primary market customers opening new accounts. FinCEN and the Agencies
estimate this cost on a per-customer basis.
---------------------------------------------------------------------------

\211\ See supra section V.B.2.
---------------------------------------------------------------------------

FinCEN estimates a range of costs for customer identification
information collection and verification--most of which would be from
legal entities.\212\ FinCEN estimates that small issuers would require
an average of one hour to correspond with each new customer and collect
the required information, while larger issuers would require only ten
minutes (0.17 hours) per new customer, owing to more volume and
onboarding automation. Thus, FinCEN uses an average of 35 minutes (0.58
hours) per new customer for non-IDI subsidiary PPSIs. For PPSI entities
affiliated with insured depository institutions, FinCEN and the
Agencies estimate more streamlined information collection processes
associated with the existing CIP program of the parent. For this
reason, FinCEN estimates an average time to correspond with each new
customer and collect the required information ranging from ten minutes
for most banks to 20 minutes for some smaller banks. FinCEN uses an
average of 15 minutes (0.25 hours) per new customer.
---------------------------------------------------------------------------

\212\ See supra section VIII.A.2.ii.b.
---------------------------------------------------------------------------

iii. Recordkeeping
The proposed rule would require certain records to be retained for
a five-year period following the creation of the record \213\ and
others to be retained for five years following an account closure.\214\
To allocate burden to these obligations, FinCEN PRA estimates allow for
non-labor, technology costs that include an annual $100 baseline cost
for each PPSI and a per-record cost of $0.10 associated with storing
new customer records in accordance with

[[Page 37267]]

similar estimates in prior rulemakings.\215\
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\213\ See supra note 168.
\214\ See supra note 169.
\215\ See, e.g., FinCEN, Agency Information Collection
Activities; Proposed Renewal; Comment Request; Renewal Without
Change on Information Sharing Between Government Agencies and
Financial Institutions, 90 FR 47125 (Sept. 30, 2025).
---------------------------------------------------------------------------

iv. Comparison With Government Lists
The proposed rule would require a PPSI's CIP to include reasonable
procedures for determining whether a customer appears on any list of
known or suspected terrorists or terrorist organizations issued by any
Federal government agency and designated as such by Treasury in
consultation with the Federal payment stablecoin regulators. While such
a list has not yet been issued, a nominal one-hour burden in the PRA
section is assigned to this requirement to account for the possible
future issuance of such lists.
v. Customer Notification
The proposed rule would require a PPSI's CIP to include procedures
for providing its customers with adequate notice that the issuer is
requesting information to verify their identities. Because the notice
is a standardized disclosure included with all applications, FinCEN
does not anticipate a per-customer burden, but rather a one-time
upfront cost to add the notice to application materials. FinCEN also
assigns a nominal average one-hour ongoing annual burden to review and
update the notice if necessary.\216\
---------------------------------------------------------------------------

\216\ FinCEN and the Agencies request comment on whether PPSIs
would likely incur an annual recordkeeping burden associated with
the proposed customer notification requirement, or whether the
recordkeeping burden is largely incurred when the notification is
initially drafted.
---------------------------------------------------------------------------

vi. Summary of Annual Burden Hours
Tables 7 and 8 present the estimated average annual burden hours
per respondent and the aggregate average annual burden hours for all
affected PPSIs in year one and in subsequent years, respectively.\217\
FinCEN estimates a three-year average annual burden of 264 hours per
PPSI and a three-year average annual burden of 13,178 hours for all 50
PPSIs.\218\
---------------------------------------------------------------------------

\217\ Hourly burden figures presented in Table 7 and Table 8 are
rounded to the nearest hundredth of an hour for presentation
purposes. Total burden figures are produced using unrounded figures
for accuracy.
\218\ FinCEN and the Agencies note that because, in its approach
to calculating expected time burdens, different burden estimates
apply to PPSIs of various (1) types (e.g., whether a PPSI is a
subsidiary of an insured depository institution or not) and (2)
sizes, average values may not meaningfully represent the economic
burden that any single, particular PPSI may expect to incur.

Table 7--Year-1 Burden Hour Estimates
----------------------------------------------------------------------------------------------------------------
Total
Recordkeeping burden attributed to Hours per Number of Hours per Number of burden
response responses respondent respondents hours
----------------------------------------------------------------------------------------------------------------
Establishing and maintaining a written CIP 25 1 25 20 500
(non-IDI subsidiary PPSIs)................
Establishing and maintaining a written CIP 12 1 12 30 360
(IDI-subsidiary PPSIs)....................
Obtaining/verifying customer identification 0.58 650 379 20 7,583
information (non-IDI subsidiary PPSIs)....
Obtaining/verifying customer identification 0.25 650 162.5 30 4,875
information (IDI-subsidiary PPSIs)........
Consulting government lists................ 1 1 1 50 50
Providing notice to customers.............. 1 1 1 50 50
--------------------------------------------------------------------
Total.................................. ........... ........... .............. 50 13,418
----------------------------------------------------------------------------------------------------------------

Table 8--Years 2+ Burden Hour Estimates
----------------------------------------------------------------------------------------------------------------
Total
Recordkeeping burden attributed to Hours per Number of Hours per Number of burden
response responses respondent respondents hours
----------------------------------------------------------------------------------------------------------------
Establishing and maintaining a written CIP. 10 1 10 50 500
Obtaining/verifying customer identification 0.58 650 379 20 7,583
information (non-IDI subsidiary PPSIs)....
Obtaining/verifying customer identification 0.25 650 163 30 4,875
information (IDI-subsidiary PPSIs)........
Consulting government lists................ 1 1 1 50 50
Providing notice to customers.............. 1 1 1 50 50
--------------------------------------------------------------------
Total.................................. ........... ........... .............. 50 13,058
----------------------------------------------------------------------------------------------------------------

3. Estimated Annual Total Costs
Tables 9 and 10 present the average annual cost per respondent and
total annual cost for all affected PPSIs for year one and years two and
three, respectively. FinCEN estimates an average annual labor cost of
$32,835 per PPSI and an aggregate annual labor cost of $1.64 million.
FinCEN additionally estimates an average annual non-labor cost of $165
per PPSI and an aggregate annual non-labor cost of $8,250 to account
for storage and technology costs. In total, FinCEN and the Agencies
estimate an average annual of $33,000 per PPSI \219\ and an aggregate
annual cost of $1.65 million.
---------------------------------------------------------------------------

\219\ FinCEN notes again, that due to heterogeneity across the
PPSI population, average costs may not meaningfully represent the
economic burden that any single, particular PPSI may expect to
incur.

[[Page 37268]]

Table 9--Total Estimated Cost in Year 1
----------------------------------------------------------------------------------------------------------------
Total
Recordkeeping burden attributed to Hours per Cost per burden Total cost
respondent respondent hours
----------------------------------------------------------------------------------------------------------------
Establishing and maintaining a written CIP (non-IDI subsidiary 25 $3,115 500 $62,290
PPSIs).......................................................
Establishing and maintaining a written CIP (IDI-subsidiary 12 1,495 360 44,849
PPSIs).......................................................
Obtaining/verifying customer identification information (non- 379 47,237 7,583 944,732
IDI subsidiary PPSIs)........................................
Obtaining/verifying customer identification information (IDI- 163 20,244 4,875 607,328
subsidiary PPSIs)............................................
Recordkeeping (Technology).................................... ........... 165 ......... 8,250
Consulting government lists................................... 1 125 50 6,229
Providing notice to customers................................. 1 125 50 6,229
-------------------------------------------------
Total..................................................... ........... ........... ......... 1,679,906
----------------------------------------------------------------------------------------------------------------

Table 10--Total Estimated Annual Cost in Years 2+
----------------------------------------------------------------------------------------------------------------
Total
Recordkeeping burden attributed to Hours per Cost per burden Total cost
respondent respondent hours
----------------------------------------------------------------------------------------------------------------
Establishing and maintaining a written CIP.................... 10 $1,246 500 $62,290
Obtaining/verifying customer identification information (non- 379 47,237 7,583 944,732
IDI subsidiary PPSIs)........................................
Obtaining/verifying customer identification information by 163 20,244 4,875 607,328
(IDI-subsidiary PPSIs).......................................
Recordkeeping (Technology).................................... ........... 165 ......... 8,250
Consulting government lists................................... 1 125 50 6,229
Providing notice to customers................................. 1 125 50 6,229
-------------------------------------------------
Total..................................................... ........... ........... ......... 1,635,057
----------------------------------------------------------------------------------------------------------------

4. Aggregate Burden and Cost Estimates
Estimated Number of Respondents: 50 PPSIs.
Estimated Aggregate Three-Year Average Annual Recordkeeping Burden:
Approximately 13,178 hours.
Estimated Aggregate Three-Year Average Annual Recordkeeping Cost:
Approximately $1,650,007.
5. General Request for Comments Under the Paperwork Reduction Act
FinCEN and the Agencies invite comments on: (1) whether the
collection of information is necessary for the proper performance of
the mission of FinCEN, including whether the information would have
practical utility; (2) the accuracy of FinCEN's estimate of the burden
of the proposed collection of information; (3) ways to enhance the
quality, utility, and clarity of the information required to be
maintained; (4) ways to minimize the burden of the collection of
information, including through the use of automated collection
techniques or other forms of information technology; and (5) estimates
of capital or start-up costs and costs of operation, maintenance, and
purchase of services required to report the information.

F. Riegle Community Development and Regulatory Improvement Act

Pursuant to section 302(a) of the Riegle Community Development and
Regulatory Improvement Act of 1994 (RCDRIA), in determining the
effective date and administrative compliance requirements for new
regulations that impose additional reporting, disclosure, or other
requirements on IDIs, each Federal banking agency must consider,
consistent with principles of safety and soundness and the public
interest, any administrative burdens that such regulations would place
on affected depository institutions, including small depository
institutions, and customers of depository institutions, as well as the
benefits of such regulations.\220\ In addition, section 302(b) of the
RCDRIA requires new regulations and amendments to regulations that
impose additional reporting, disclosures, or other new requirements on
insured depository institutions generally to take effect on the first
day of a calendar quarter that begins on or after the date on which the
regulations are published in final form.\221\ The Agencies invite
comments to further inform their consideration of the RCDRIA.
---------------------------------------------------------------------------

\220\ 12 U.S.C. 4802(a).
\221\ 12 U.S.C. 4802(b).
---------------------------------------------------------------------------

G. Plain Language

Section 722 of the Gramm-Leach-Bliley Act \222\ requires the
Federal banking agencies to use plain language in all proposed and
final rulemakings published in the Federal Register after January 1,
2000. The agencies invite your comments on how to make this proposed
rule easier to understand. For example:
---------------------------------------------------------------------------

\222\ 12 U.S.C. 4809.
---------------------------------------------------------------------------

Have the agencies organized the material to suit your
needs? If not, how could the proposed rule be more clearly stated?
Are the requirements in the proposed rule clearly stated?
If not, how could the proposed rule be more clearly stated?
Does the proposed rule contain language or jargon that is
not clear? If so, which language requires clarification?
Would a different format (grouping and order of sections,
use of headings, paragraphing) make the proposed rule easier to
understand? If so, what changes to the format would make the proposed
rule easier to understand?
What else could the agencies do to make the proposed rule
easier to understand?

H. Providing Accountability Through Transparency Act of 2023

The Providing Accountability Through Transparency Act of 2023
requires that a notice of proposed rulemaking include the internet
address of a summary of not more than 100 words in length of a proposed
rule, in plain language, that shall be posted on the internet website
under section 206(d) of the E-Government Act of 2002.\223\
---------------------------------------------------------------------------

\223\ 5 U.S.C. 553(b)(4).

---------------------------------------------------------------------------

[[Page 37269]]

The proposal and the required summary can be found at
www.regulations.gov by searching for Docket IDs FINCEN-2026-0101, OCC-
2026-0331 or NCUA-2026-0793 or https://www.fdic.gov/federal-register-publications.

I. Additional Requests for Comment

1. Are FinCEN and the Agencies' baseline estimates of the number of
market participants accurate? Are there specific sources of data that
would suggest any of these population estimates should be revised?
Please provide data, studies, or anecdotal evidence that would support
any suggested alternatives.
2. Are there other distinct, identifiable subpopulations of the
general public that could reasonably be directly affected by the
proposed rule and should have been considered in the RIA? Please
provide data, studies, or reports that would enhance FinCEN and the
Agencies' ability to identify and quantify such effects.
3. FinCEN and the Agencies assume that a number of depository
institutions would have affiliates or subsidiaries that seek PPSI
status and that other PPSIs would not be subsidiaries of insured
depository institutions. How likely are issuers or potential issuers to
seek PPSI status as a subsidiary of an insured depository institution
versus seeking PPSI status not as a subsidiary of an insured depository
institution?
4. FinCEN and the Agencies made certain assumptions, based on data,
about the number of primary customers that a typical PPSI would have.
How many primary market customers does a typical issuer of payment
stablecoin-type products interact with? What costs do issuers face in
collecting customer information from these entities? How many are these
customers are new to the issuer on an annual basis?
5. Is it likely that any of the 14,575 financial institutions
listed in Table 2 would be relied upon by PPSIs for some aspect of
their CIP compliance? Please provide data, studies, reports, or
anecdotal evidence that would enhance FinCEN and the Agencies' ability
to identify and quantify the effects of such reliance.
6. To what extent should the economic impact on state regulatory
agencies be considered in the RIA? Please provide data, studies, or
reports that would support the identification enhance FinCEN's ability
to identify and quantify such effects.
7. Is FinCEN and the Agencies' analysis of the average costs for
each component of the CIP as outlined in section VIII.A.4.ii.a
reasonable reflection of the cost faced by issuers of products that may
be considered payment stablecoins? If not, are there specific sources
of empirical evidence or data that would suggest these burden estimates
should be revised? Are there any additional cost categories related to
establishing and maintaining a CIP that FinCEN and the Agencies have
failed to consider? Please provide data, studies, or anecdotal evidence
that would support any suggested revisions.
8. What types and share of PPSIs would likely already have CIPs
established and would therefore not incur the full costs associated
with establishing and maintaining a CIP? Are there certain CIPs or
customer identification practices implemented by stablecoin issuers
that this analysis should take into account? Please provide data,
studies, or reports that would enhance FinCEN and the Agencies' ability
to identify this population.
9. Is it reasonable to assume that PPSIs would already have
measures in place to form a reasonable belief that they know the true
identities of their existing customers and therefore would not need to
obtain and verify customer identification information for any of their
existing primary market customers in the first year once the rule would
become effective? If not, what share of PPSIs would need to obtain and
verify customer identification for all or a portion of their existing
customers? Are there specific sources of empirical evidence or data
that would suggest this assumption should be revised? Please provide
data, studies, or anecdotal evidence that would support the suggested
alternative assumption.
10. FinCEN and the Agencies request comment on the alternative
policy options presented in section VIII.A.5 and their economic effect.
11. FinCEN utilized a threshold of less than $200 million in total
reserve assets to define a small payment stablecoin issuer. How
appropriate is this threshold? Similarly, is five percent of total
reserve assets a good estimation of these firms' revenue?
12. The RIA in this NPRM does not include a forecasted population
of potential future SQPSIs due to limitations in data availability.
Please provide data, studies, or anecdotal evidence that would enable
analysis of the potential effects of the proposed requirements on
SQPSIs, generally, and small SQPSIs in particular.
13. The FDIC, Board, NCUA, and OCC invite comments on all aspects
of the supporting information provided in sections VIII.C.2-5,
particularly related to any significant effects on small entities that
the agency has not identified.
14. The economic expectation that the proposed rule may have a
significant economic impact on a substantial number of certain types of
potentially affected small entities is sensitive to key assumptions
about how potentially affected financial institutions would respond to
the proposed requirements. FinCEN and the Agencies request comment on
whether it would instead be more reasonable to certify that the
proposed rule would not have a significant economic impact on a
substantial number of small entities.
15. FinCEN and the Agencies do not anticipate that the proposed
rule would result in novel incremental aggregate expenditures by State,
local, or Tribal governments, or by the private sector of $193 million
or more in any one year. Is this assumption reasonable? If not, what
studies, data, or anecdotal evidence should be taken into consideration
that would update this expectation?
16. Would PPSIs incur ongoing recordkeeping burdens associated with
the proposed customer notification requirement? Or is the recordkeeping
burden largely incurred when the notification is initially drafted? If
it is an ongoing burden, what is the average amount of time spent on
the recordkeeping activity per year?

J. NCUA Analysis on Executive Order 13132 on Federalism

Executive Order 13132 encourages certain regulatory agencies to
consider the impact of their actions on state and local interests. The
NCUA, an agency as defined in 44 U.S.C. 3502(5), complies with the
executive order to adhere to fundamental federalism principles. This
proposed rule would apply to PPSIs. This scope is set by statute. The
NCUA works cooperatively with state regulatory agencies on all
supervisory matters, including AML/CFT matters, and will continue to do
so. The NCUA expects that any effect on states or on the distribution
of power and responsibilities among the various levels of government
will be minor. The NCUA welcomes comments on ways to eliminate, or at
least minimize, any potential impact in this area.

K. NCUA Assessment of Federal Regulations and Policies on Families

The NCUA has determined that this proposed rule would not affect
family well-being within the meaning of section 654 of the Treasury and
General Government Appropriations Act,

[[Page 37270]]

1999.\224\ The proposed rule relates to PPSIs, and any effect on family
well-being is expected to be indirect.
---------------------------------------------------------------------------

\224\ Public Law 105-277, section 654, 112 Stat. 2681, 2681-528
(1998).
---------------------------------------------------------------------------

List of Subjects in 31 CFR Part 1033

Administrative practice and procedure, Banks, banking, Business and
industry, Electronic filing, Foreign persons, Investigations, Law
enforcement, Reporting and recordkeeping requirements, Terrorism.
For the reason set forth in the preamble, FinCEN and the OCC,
Board, FDIC, and NCUA propose that FinCEN amend 31 CFR part 1033, as
proposed to be added at 91 FR 18582 (April 10, 2026), as follows:

PART 1033--RULES FOR PERMITTED PAYMENT STABLECOIN ISSUERS

0
1. The authority citation for part 1033 continues to read as follows:

Authority: 12 U.S.C. 1829b, 1951-1959, and 5901-5916; 31 U.S.C.
5311-5314 and 5316-5336; title III, sec. 314, Pub. L. 107-56, 115
Stat. 307; sec. 701, Pub. L. 114-74, 129 Stat. 599.

0
2. In Sec. 1033.100, add paragraphs (a) through (c) to read as
follows:

Sec. 1033.100 Definitions.

* * * * *
(a) Account. For the purposes of Sec. 1033.220:
(1) Account means a formal relationship between a customer and a
permitted payment stablecoin issuer established to provide or engage in
services, dealings, or other financial transactions including but not
limited to--
(i) Issuing or redeeming a payment stablecoin;
(ii) Managing related reserves, including purchasing, selling, and
holding reserve assets or providing custodial services for reserve
assets;
(iii) Providing custodial or safekeeping services for payment
stablecoins, required reserves, or private keys of payment stablecoins;
(iv) Other activities that directly support activities in
paragraphs (a)(1)(i) through (iii) of this section; or
(v) Providing services of a digital asset service provider.
(2) Account does not include:
(i) A product or service where a formal relationship is not
established with a person, such as payment stablecoin activity that
does not directly involve the permitted payment stablecoin issuer as a
party to the transaction other than via a smart contract;
(ii) An account that the permitted payment stablecoin issuer
acquires through an acquisition, merger, purchase of assets, or
assumption of liabilities from a financial institution regulated by a
Federal functional regulator or a bank regulated by a State bank
regulator;
(iii) An account opened for the purpose of participating in an
employee benefit plan established under the Employee Retirement Income
Security Act of 1974; or
(iv) Ownership or control of a permitted payment stablecoin
issuer's payment stablecoins alone, without other indicators of a
formal relationship.
(b) Customer. For the purposes of Sec. 1033.220:
(1) Customer means:
(i) A person that opens a new account; and
(ii) An individual who opens a new account for:
(A) An individual who lacks legal capacity, such as a minor; or
(B) An entity that is not a legal person, such as a civic club.
(2) Customer does not include:
(i) A financial institution regulated by a Federal functional
regulator or a bank regulated by a State bank regulator;
(ii) A person described in 31 CFR 1020.315(b)(2) through (4);
(iii) A person that has an existing account with the permitted
payment stablecoin issuer, provided the permitted payment stablecoin
issuer has a reasonable belief that it knows the true identity of the
person; or
(iv) A person acquiring or redeeming a payment stablecoin from a
means other than directly from or directly to the permitted payment
stablecoin issuer.
(c) Digital asset service provider. For the purposes of Sec.
1033.220:
(1) Digital asset service provider means an individual,
partnership, company, corporation, association, trust, estate,
cooperative organization, or other business entity, incorporated or
unincorporated that, for compensation or profit, engages in business in
the United States (including on behalf of customers or users in the
United States) of:
(i) Exchanging digital assets for monetary value, meaning a
national currency or deposit denominated in a national currency;
(ii) Exchanging digital assets for other digital assets;
(iii) Transferring digital assets to a third party;
(iv) Acting as a digital asset custodian; or
(v) Participating in financial services relating to digital asset
issuance.
(2) Digital asset service provider does not include:
(i) A distributed ledger protocol,
(ii) Developing, operating, or engaging in the business of
developing distributed ledger protocols or self-custodial software
interfaces;
(iii) An immutable and self-custodial software interface;
(iv) Developing, operating, or engaging in the business of
validating transactions or operating a distributed ledger; or
(v) Participating in a liquidity pool or other similar mechanism
for the provisioning of liquidity for peer-to-peer transactions.
(3) For purposes of this paragraph (c), the term distributed ledger
protocol means a publicly available and accessible executable software
deployed to a distributed ledger, including smart contracts or networks
of smart contracts.
0
3. Add Sec. 1033.220 to read as follows:

Sec. 1033.220 Customer identification programs for permitted payment
stablecoin issuers.

(a) Customer identification program: minimum requirements--(1) In
general. A permitted payment stablecoin issuer must establish and
maintain a written Customer Identification Program (CIP) appropriate
for its size and business that, at a minimum, includes each of the
requirements of paragraphs (a)(1) through (5) of this section. The CIP
must be a part of the permitted payment stablecoin issuer's anti-money
laundering (AML)/countering the financing of terrorism (CFT) program.
(2) Identity verification procedures. The CIP must include risk-
based procedures for verifying the identity of each customer to the
extent reasonable and practicable. The procedures must enable the
permitted payment stablecoin issuer to form a reasonable belief that it
knows the true identity of each customer. The procedures must be based
on the permitted payment stablecoin issuer's assessment of the relevant
risks, including those presented by the various types of accounts
maintained by the permitted payment stablecoin issuer, the various
methods of opening accounts provided by the permitted payment
stablecoin issuer, the various types of identifying information
available and the permitted payment stablecoin issuer's size, location,
and customer base. At a minimum, these procedures must contain the
elements described in this paragraph (a)(2).
(i) Customer information required--(A) In general. The CIP must
contain procedures for opening an account that specify the identifying
information that

[[Page 37271]]

will be obtained with respect to each customer. Except as permitted by
paragraph (a)(2)(i)(B) of this section, the permitted payment
stablecoin issuer must obtain, at a minimum, the following information
from the customer prior to opening an account:
(1) Name;
(2) Date of birth, for an individual; or date of formation, for a
person that is not an individual;
(3) Address, which shall be:
(i) For an individual, a residential or business street address;
(ii) For an individual who does not have a residential or business
street address, an Army Post Office (APO) or Fleet Post Office (FPO)
box number, of the residential or business street address of a next of
kin or of another contact individual; or
(iii) For a person other than an individual (such as a corporation,
partnership, or trust), a principal place of business, local office, or
other physical location; and
(4) Identification number, which shall be:
(i) For a U.S. person, a taxpayer identification number; or
(ii) For a non-U.S. person, one or more of the following: a
taxpayer identification number; passport number and country of
issuance; alien identification card number; or number and country of
issuance of any other government-issued document evidencing nationality
or residence and bearing a photograph or similar safeguard; or
(iii) For a non-U.S. person that is not an individual and that does
not have an identification number, the permitted payment stablecoin
issuer must request alternative government-issued documentation
certifying the existence of the person.
(B) Exception for persons applying for a taxpayer identification
number. Instead of obtaining a taxpayer identification number from a
customer prior to opening an account, the CIP may include procedures
for opening an account for a person that has applied for, but has not
received, a taxpayer identification number. In this case, the CIP must
include procedures to confirm that the application was filed before the
person opens the account and to obtain the taxpayer identification
number within a reasonable period of time after the account is opened.
(ii) Customer verification. The CIP must contain procedures for
verifying the identity of each customer, using information obtained in
accordance with paragraph (a)(2)(i) of this section, within a
reasonable time before or after the customer's account is opened. The
procedures must describe when the permitted payment stablecoin issuer
will use documents, non-documentary methods, or a combination of both
methods, as described in this paragraph (a)(2)(ii).
(A) Verification through documents. For a permitted payment
stablecoin issuer relying on documents, the CIP must contain procedures
that set forth the documents the permitted payment stablecoin issuer
will use. These documents may include:
(1) For an individual, an unexpired government-issued
identification evidencing nationality or residence and bearing a
photograph or similar safeguard, such as a driver's license or
passport; and
(2) For a person other than an individual (such as a corporation,
partnership, or trust), documents and any amendments thereto showing
the existence of the entity, such as certified articles of
incorporation, a government-issued business license, a partnership
agreement, or a trust instrument.
(B) Verification through non-documentary methods. For a permitted
payment stablecoin issuer relying on non-documentary methods, the CIP
must contain procedures that set forth the non-documentary methods the
permitted payment stablecoin issuer will use.
(1) These methods may include contacting a customer; independently
verifying the customer's identity through the comparison of information
provided with respect to the customer with information obtained from a
consumer reporting agency, public database, or other source; checking
references with other financial institutions; or obtaining a financial
statement.
(2) The permitted payment stablecoin issuer's non-documentary
procedures must address situations where an individual is unable to
present an unexpired government-issued identification document that
bears a photograph or similar safeguard; the permitted payment
stablecoin issuer is not familiar with the documents presented; the
account is opened without obtaining documents; the customer opens the
account without meeting in person; and the permitted payment stablecoin
issuer is otherwise presented with circumstances that increase the risk
that the permitted payment stablecoin issuer will be unable to verify
the true identity of a customer through documents.
(C) Additional verification for certain customers. The CIP must
address situations where, based on the permitted payment stablecoin
issuer's risk assessment of a new account opened by a customer that is
not an individual, the permitted payment stablecoin issuer will obtain
information about individuals with authority or control over such
account in order to verify the customer's identity. This verification
method applies only when the permitted payment stablecoin issuer cannot
verify the true identity of a customer that is not an individual using
the verification methods described in paragraphs (a)(2)(ii)(A) and (B)
of this section.
(iii) Lack of verification. The CIP must include procedures for
responding to circumstances in which the permitted payment stablecoin
issuer cannot form a reasonable belief that it knows the true identity
of a customer. These procedures should describe:
(A) When the permitted payment stablecoin issuer should not open an
account;
(B) The terms under which a customer may use an account while the
permitted payment stablecoin issuer attempts to verify the customer's
identity;
(C) When the permitted payment stablecoin issuer should close an
account after attempts to verify a customer's identity fail; and
(D) When the permitted payment stablecoin issuer should file a
Suspicious Activity Report in accordance with applicable law and
regulation.
(3) Recordkeeping. The CIP must include procedures for making and
maintaining a record of all information obtained under procedures
implementing this paragraph (a).
(i) Required records. At a minimum, the record must include:
(A) All identifying information about a customer obtained under
paragraph (a)(2)(i) of this section;
(B) A description of any document that was relied on under
paragraph (a)(2)(ii)(A) of this section, noting the type of document,
any identification number contained in the document, the place of
issuance, and if any, the date of issuance and expiration date;
(C) A description of the methods and results of any measures
undertaken to verify the identity of a customer under paragraphs
(a)(2)(ii)(B) and (C) of this section; and
(D) A description of the resolution of each substantive discrepancy
discovered when verifying the identifying information obtained.
(ii) Retention of records. The permitted payment stablecoin issuer
must retain the records made under paragraph (a)(3)(i)(A) of this
section for five years after the date the account is closed and the
records made under

[[Page 37272]]

paragraphs (a)(3)(i)(B) through (D) of this section for five years
after the record is made.
(4) Comparison with Government lists. The CIP must include
reasonable procedures for determining whether a customer appears on any
list of known or suspected terrorists or terrorist organizations issued
by any Federal Government agency and designated as such by Treasury in
consultation with the primary Federal payment stablecoin regulators.
The procedures must require the permitted payment stablecoin issuer to
make such a determination within a reasonable period of time after the
account is opened, or earlier if required by another Federal law or
regulation or Federal directive issued in connection with the
applicable list. The procedures must also require the permitted payment
stablecoin issuer to follow all Federal directives issued in connection
with such lists.
(5) Notice--(i) Customer notice. The CIP must include procedures
for providing customers with adequate notice that the permitted payment
stablecoin issuer is requesting information to verify their identities.
(ii) Adequate notice. Notice is adequate if the permitted payment
stablecoin issuer generally describes the identification requirements
of this section and provides such notice in a manner reasonably
designed to ensure that a prospective customer is able to view the
notice, or is otherwise given notice, before opening an account. For
example, depending upon the manner in which the account is opened, a
permitted payment stablecoin issuer may post a notice on its website,
include the notice in its account applications, or use any other form
of oral or written notice.
(iii) Sample notice. If appropriate, a permitted payment stablecoin
issuer may use the following sample language to provide notice to its
customers:

IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT

To help the government fight the funding of terrorism and money
laundering activities, Federal law requires all financial
institutions to obtain, verify, and record information that
identifies each natural or legal person who opens an account, which
may be an individual or a person other than an individual (such as a
corporation, partnership, or trust).
What this means for you: When you open an account, we will ask
for the name, address, date of birth or formation, tax
identification number, and other information pertaining to the
accountholder. This information will help us verify the identity of
the accountholder. We may also ask to see identifying documents
pertaining to the accountholder, such as a driver's license (if you
are an individual) or a business license, articles of incorporation,
or trust instrument (if the accountholder is not an individual).

(6) Reliance on another financial institution. The CIP may include
procedures specifying when the permitted payment stablecoin issuer will
rely on the performance by another financial institution (including an
affiliate) of any procedures of the permitted payment stablecoin
issuer's CIP, with respect to any customer of the permitted payment
stablecoin issuer that is opening, or has opened, an account or has
established an account or similar business relationship with the other
financial institution to provide or engage in services, dealings, or
other financial transactions, provided that:
(i) Such reliance is reasonable under the circumstances;
(ii) The other financial institution is subject to a rule
implementing 31 U.S.C. 5318(h) or 12 U.S.C. 5903(a)(5)(A) and is
regulated by a Federal functional regulator; and
(iii) The other financial institution enters into a contract with
the permitted payment stablecoin issuer requiring it to certify
annually to the permitted payment stablecoin issuer that it has
implemented its AML/CFT program, and that it will perform (or its agent
will perform) specified requirements of the permitted payment
stablecoin issuer's CIP.
(b) Exemptions. The appropriate Federal functional regulator, with
the concurrence of the Secretary, may, by order or regulation, exempt
any permitted payment stablecoin issuer or any type of account from the
requirements of this section. The Secretary, with the concurrence of
the Federal functional regulator, may exempt any permitted payment
stablecoin issuer or any type of account from the requirements of this
section. In issuing such exemptions, the Federal functional regulator
and the Secretary shall consider whether the exemption is consistent
with the purposes of the Bank Secrecy Act and with safety and
soundness, in the public interest, and may consider other necessary and
appropriate factors.
(c) Other requirements unaffected. Nothing in this section relieves
a permitted payment stablecoin issuer of its obligation to comply with
any other provision of this chapter, including provisions concerning
information that must be obtained, verified, or maintained in
connection with any account or transaction, or its obligations with
respect to complying with the terms of any lawful order as set forth in
this chapter.

Andrea M. Gacki,
Director, Financial Crimes Enforcement Network.

Jointly issued by:
Office of the Comptroller of the Currency.

Jonathan V. Gould,
Comptroller of the Currency.

By order of the Board of Governors of the Federal Reserve
System.

Benjamin McDonough,
Secretary of the Board.

Federal Deposit Insurance Corporation.
By order of the Board of Directors.

Dated at Washington, DC, on May 13, 2026.
Jennifer M. Jones,
Deputy Executive Secretary.
By the National Credit Union Administration Board, this 12th day
of May 2026.
Melane Conyers-Ausbrooks,
Secretary of the Board.
[FR Doc. 2026-12460 Filed 6-18-26; 8:45 am]
BILLING CODE 4810-02-P

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