Large U.S. banking organizations propose to include customer identification requirements for the secondary market of stablecoins

The Bank Policy Institute (BPI) is an organization representing large banks such as JPMorgan, Bank of America, Wells Fargo, and Citi. BPI proposed that the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury should expand customer identification program requirements to the secondary market for stablecoins, covering exchanges and other platforms that establish direct account relationships with retail investors.

BPI stated that the relevant exchanges and platforms engage in a significant amount of buying and selling activities within the payment stablecoin ecosystem, where most illegal activities related to stablecoins occur. If the proposal is incorporated into the rules, the relevant platforms will be required to collect customer information in accordance with the Bank Secrecy Act, and decentralized exchanges may also fall under regulatory oversight. The proposed rules by FinCEN indicate that transactions in the secondary market for stablecoins on the blockchain typically use anonymous or pseudonymous identities, and there are no centralized nodes for collecting identity information, limiting the ability of issuers to gather customer data from the secondary market. BPI has also opposed the current version of the Digital Asset Market Structure Bill along with other banking organizations.