The Bank Policy Institute (BPI), a lobbying organization representing major U.S. financial institutions including JPMorgan, Bank of America, Wells Fargo, and Citi, has submitted a comment letter to the Financial Crimes Enforcement Network (FinCEN). The group is urging regulators to extend customer identification requirements to secondary stablecoin markets.
In response to FinCEN's proposed “Permitted Payment Stablecoin Issuer Customer Identification Program,” the banking group requested that Customer Identification Program (CIP) provisions be applied to exchanges and platforms that interact directly with retail customers but currently fall outside the proposed rule's oversight. According to BPI, these entities handle a significant share of payment stablecoin purchases and sales, which the organization argues is where the majority of illicit activity involving stable assets occurs.
The recommendation calls for the rule to specify that exchanges and platforms establishing customer account relationships for stablecoin activity are subject to CIP requirements under the Bank Secrecy Act. This expansion would encompass various decentralized market participants, effectively pulling decentralized exchanges under the proposed secondary market oversight umbrella.
FinCEN's original proposed rule notes that collecting information across secondary markets would present practical challenges, even while acknowledging potential benefits. The regulatory text highlights that blockchain transactions are frequently anonymous or pseudonymous, operating on decentralized algorithms without a central data collection point. Consequently, stablecoin issuers possess limited capability to gather customer information on secondary markets.
Previously in May, BPI and other banking entities opposed the current version of the Digital Asset Market Clarity Act, arguing it left loopholes that could permit the distribution of activity-based yield to stablecoin users.
