ME News reports that on August 26 (UTC+8), the U.S. Blockchain Association urged federal regulators to limit KYC requirements to interactions between stablecoin issuers and their direct customers when implementing the GENIUS Act’s stablecoin regulatory framework, avoiding the extension of KYC to downstream peer-to-peer wallet transfers. In an comment letter submitted on August 21, the association stated that issuers should not be held responsible for verifying identities in P2P stablecoin transactions they did not participate in, facilitate, or approve, as such requirements would be “nearly impossible to enforce” and could even “stifle the industry.” The association also recommended that regulators permit issuers to use modern technologies such as digital identities and zero-knowledge proofs for customer verification, and allow issuers to reasonably rely on regulated financial institutions for KYC while receiving appropriate liability protections. Additionally, the association called on regulators to align the implementation timelines of the GENIUS Act with FinCEN’s anti-money laundering and OFAC sanctions rules to prevent stablecoin issuers from repeatedly upgrading their compliance systems due to staggered regulatory rollouts. (Source: BlockBeats)
Crypto Industry Group Warns Regulators Against Expanding Stablecoin KYC
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Summary
The U.S. Blockchain Association warned regulators against expanding KYC requirements for stablecoin transactions under the GENIUS Act, stating that extending checks to peer-to-peer transfers would harm liquidity and crypto markets. The group urged the use of digital identity and zero-knowledge proofs for stablecoin regulation and called for aligning the framework with FinCEN and OFAC timelines to avoid redundant upgrades.
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