Bank Policy Institute Urges FinCEN to Expand Customer Identification Rules to Stablecoin Secondary Markets

Bank Policy Institute, which represents major banks including JPMorgan, Bank of America, Wells Fargo, and Citi, has proposed that the U.S. Treasury Department’s Financial Crimes Enforcement Network expand customer identification requirements to stablecoin secondary markets. According to Odaily, the proposal would cover exchanges and other platforms that maintain direct account relationships with retail users.BPI said these exchanges and platforms handle much of the buying and selling activity in the payment stablecoin ecosystem, where most stablecoin-related illicit activity occurs. If the proposal is adopted, the platforms would be required under the Bank Secrecy Act to collect customer information, and decentralized exchanges could also fall under regulation.FinCEN’s draft rule said stablecoin secondary market transactions on blockchains typically use anonymous or pseudonymous identities and do not have a centralized node that collects identity information, limiting issuers’ ability to gather customer data from secondary markets. BPI has also joined other banking groups in opposing the current version of the Digital Asset Market Clarity Act.