The Federal Reserve rolled out a rule proposal requiring stablecoin issuers to have a program in place to identify customers to combat illicit finance.
On Thursday, the central bank released that 130-page rulemaking as part of implementing a stablecoin bill passed into law called the Guiding and Establishing National Innovation for U.S. Stablecoins Act, better known as the GENIUS Act. The rulemaking would more closely align standards under the Bank Secrecy Act that financial institutions follow.
The Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the National Credit Union Administration were also involved in the proposed rulemaking.
Five members of the central bank voted to approve of the proposed rule, with new Federal Reserve Chair Kevin Warsh abstaining. Fed Gov. Michael Barr said he supported issuing the proposal, but said he had other concerns about whether the GENIUS Act goes far enough to address illicit finance risks in secondary market transactions.
"While some digital asset service providers are subject to anti-money laundering and anti-terrorist financing requirements in their home jurisdiction, it is far too easy for bad actors to evade these restrictions and operate without detection when transacting in digital assets," Barr said in a statement.
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