The crypto trade group says stablecoin-specific rules would fit better than generic bank-style customer checks. The Blockchain Association, a Washington-based trade group representing crypto
The crypto trade group says stablecoin-specific rules would fit better than generic bank-style customer checks.
The Blockchain Association, a Washington-based trade group representing crypto companies, has called on the U.S. Treasury to write know-your-customer rules tailored to stablecoin issuers. The group argues that generic, bank-modeled KYC standards do not fit how stablecoins actually operate.
Stablecoins are digital tokens pegged to assets like the U.S. dollar. They are widely used for payments, trading, and settlement across crypto markets. Because issuers sit at a different point in the transaction chain than banks, the Blockchain Association contends that customer-verification rules built for depository institutions may not translate cleanly.
Alongside its KYC recommendations, the group also voiced support for Treasury's proposed rules under the GENIUS Act framework. The GENIUS Act is the federal legislation that established a regulatory structure for payment stablecoins. Treasury has been working through the rulemaking process to flesh out how issuers must operate under that law.
Backing the broader Treasury proposal while pushing for tailored KYC provisions suggests the Blockchain Association sees the overall framework as workable. Its comments appear aimed at refining specific compliance mechanics rather than opposing the law's structure.
KYC rules typically require financial firms to verify customer identities and monitor for suspicious activity. For stablecoin issuers, the question is how those obligations apply when tokens circulate freely across wallets and exchanges after issuance. The Blockchain Association's position implies that issuers need distinct guidance addressing that circulation, rather than rules written with traditional deposit-taking banks in mind.
The timing places these comments within the broader rulemaking process Treasury has undertaken since the GENIUS Act's passage. Regulators have been soliciting industry input as they draft implementing rules. Trade groups, issuers, and other stakeholders have used that process to push for provisions they view as workable at scale.
Stablecoin oversight has drawn significant attention as issuance volumes have grown and as tokens have become embedded in payments and trading infrastructure. Clear, tailored compliance rules are seen by industry participants as important for continued growth without excessive friction. Overly rigid or mismatched requirements, by contrast, could raise compliance costs or push activity toward less-regulated venues.
The Blockchain Association's dual position, support for the Treasury framework paired with a request for tailored KYC treatment, illustrates how industry groups are engaging constructively with regulators while still lobbying for specific technical adjustments. That approach may shape how final rules address the practical realities of stablecoin circulation.
Tailored KYC rules, if adopted, could affect how stablecoin issuers structure their compliance operations and onboarding processes. Clearer, industry-specific standards may reduce operational uncertainty for issuers currently navigating rules designed for traditional banks.
Broader industry support for the Treasury's GENIUS Act rulemaking could also signal reduced friction between regulators and stablecoin issuers going forward. That dynamic may matter for institutions considering entry into the stablecoin market as the regulatory framework becomes clearer.
The Blockchain Association's comments add to an ongoing rulemaking process as Treasury finalizes how the GENIUS Act will govern stablecoin issuers. The final shape of KYC requirements remains to be determined.
It is a Washington-based trade group representing companies across the cryptocurrency industry, including exchanges, issuers, and infrastructure providers.
The GENIUS Act is federal legislation that established a regulatory framework for payment stablecoins in the United States, which Treasury is now implementing through rulemaking.
The group argues that customer-verification standards built for traditional banks do not account for how stablecoins circulate after issuance, and that stablecoin-specific rules would be more workable.
No, the group has expressed support for Treasury's overall proposed rules under the GENIUS Act, while also requesting adjustments specifically to KYC provisions.
Originally reported by AltcoinGordon, written by Olivia Hayes. Republished with permission.
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