BPI Proposes Including Stablecoin Secondary Market in Customer Identification Requirements

The Bank Policy Institute (BPI) has proposed that the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury expand customer identification program requirements to include the stablecoin secondary market, covering exchanges and other platforms that establish direct account relationships with retail investors. BPI noted that these exchanges and platforms engage in a significant amount of trading activity within the payment stablecoin ecosystem, where most illegal activities related to stablecoins occur. If the proposal is incorporated into regulations, these platforms will be required to collect customer information in accordance with the Bank Secrecy Act, and decentralized exchanges may also be subject to regulation. FinCEN's proposed rule indicates that transactions in the stablecoin secondary market on the blockchain typically use anonymous or pseudonymous identities and lack centralized nodes for collecting identity information, limiting the ability of issuers to gather customer data from the secondary market. Previously, BPI, along with other banking organizations, opposed the current version of the Digital Asset Market Structure Act.

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