Bank Policy Institute, a banking group representing major U.S. lenders including JPMorgan, Bank of America, Wells Fargo and Citi, has proposed that the Financial Crimes Enforcement Network expand customer identification program requirements to the secondary market for stablecoins. The proposal would apply to exchanges and other platforms that maintain direct account relationships with retail users.
BPI argued that a large share of buying and selling activity in the payment stablecoin ecosystem takes place on those venues, and that most illicit activity tied to stablecoins occurs there as well. If FinCEN adopts the recommendation in its rulemaking, affected platforms would be required to collect customer information under the Bank Secrecy Act. Decentralized exchanges could also fall within the regulatory perimeter.
FinCEN’s proposed rule says secondary-market stablecoin transactions on blockchains are commonly conducted through anonymous or pseudonymous identities and lack a centralized point for collecting user information. It also noted that issuers have limited ability to gather data on customers in the secondary market. BPI has previously joined other banking organizations in opposing the current version of the Digital Asset Market Clarity Act, according to Bitcoin.com News.
Bank Policy Institute, a group representing major U.S. banks including JPMorgan, Bank of America, Wells Fargo and Citi, has proposed that the Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, extend customer identification program requirements to the secondary market for stablecoins.
The proposal targets exchanges and other platforms that establish direct account relationships with retail customers.
Proposal focuses on secondary-market trading venues
BPI said those exchanges and platforms handle a large share of buying and selling activity in the payment stablecoin ecosystem. It also said most illicit activity related to stablecoins takes place there.
If the proposal is incorporated into the rule, affected platforms would have to collect customer information under the Bank Secrecy Act. Decentralized exchanges could also be brought into scope.
FinCEN draft highlights identity gaps on-chain
FinCEN’s proposed rule says secondary-market stablecoin transactions on blockchains are typically conducted through anonymous or pseudonymous identities, and there is no centralized node that collects identity information. The agency also said issuers have limited ability to gather customer data from secondary-market participants.
BPI also opposed current bill version
BPI has also joined other banking organizations in opposing the current version of the Digital Asset Market Clarity Act.
The report was cited by Bitcoin.com News.
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