The Federal Reserve has proposed new rules to regulate stablecoin issuers in the US. The proposal, issued jointly with the Treasury Department and FDIC, aims to implement provisions of the GENIUS Act, which legalized the issuance of stablecoins last summer.
Former Fed Chair Jerome Powell voted in favor of the proposal, but current Chair Kevin Warsh abstained without explanation.
The proposed rulemaking requires entities involved in exchanging or transferring crypto to verify customers' names, birthdates, and addresses. This data will be cross-referenced with lists of terrorists and blacklisted groups provided by the US government.
Decentralized protocols are exempt from these requirements, a feature that prompted Fed Governor Michael Barr to express concern about the risks of illicit finance through stablecoin transactions.