Big Banks Push for Identity Checks on Secondary Stablecoin Markets

The Bank Policy Institute (BPI), representing major U.S. banks such as JPMorgan, Bank of America, Wells Fargo and Citi, submitted a comment letter to FinCEN requesting that the Customer Identification Program (CIP) requirements be applied to secondary stablecoin markets.

Proposed Extension of CIP Rules

BPI argues that exchanges and other platforms that have direct relationships with retail customers should be subject to the Bank Secrecy Act’s identity‑verification obligations, similar to the rules already proposed for stablecoin issuers.

Rationale and Expected Impact

• BPI says secondary market participants play a “significant role” in the stablecoin ecosystem and are where most illicit activity occurs.
• Applying CIP would require retail and decentralized exchanges to collect user data, potentially improving anti‑money‑laundering oversight.
• The FinCEN proposal acknowledges that implementing such requirements is “practically challenging” due to blockchain anonymity and the lack of a central data collection point.

Challenges Highlighted by FinCEN

The agency notes that many blockchain transactions are anonymous or pseudonymous, and that issuers have limited ability to gather customer information on secondary markets.

Broader Regulatory Context

Earlier this year, BPI and other banking groups opposed the Digital Asset Market Clarity Act, criticizing it for leaving loopholes that could enable unregulated stablecoin yield activities.