Bank Lobby Pushes for Mandatory Account Opening for Stablecoin Cash‑Outs

The American Bankers Association (ABA) has asked U.S. regulators to make it mandatory for anyone who buys or redeems a payment stablecoin directly with the issuer to open an account and complete a Customer Identification Program (CIP). The proposal would turn a one‑off cash‑out from self‑custody into an issuer‑onboarding event.

Competing Positions

ABA stance: Every direct purchase or redemption of a payment stablecoin should trigger the issuer’s CIP. The holder would need to provide identifying information before receiving dollars. The ABA also wants exchanges and other secondary‑market service providers to face comparable customer‑identification rules.

Blockchain Association stance: Direct primary‑market customers should indeed undergo the issuer’s CIP, but the association wants to preserve the option for a one‑off redemption without creating an account. When a regulated intermediary aggregates tokens and redeems them on behalf of its users, the intermediary—not each downstream holder—should be the issuer’s customer.

Regulatory Context

The debate appears in comments on a joint federal proposal (R‑1885) that would require permitted payment stablecoin issuers to operate a CIP for customers who open accounts. The June proposal leaves the “cash‑out boundary” unresolved, prompting the two industry groups to argue over who must complete the CIP.

Current Industry Practices

Issuers such as Circle (USDC) and Paxos already require verified accounts for U.S. redemptions. Circle routes eligible redemptions through a Circle Mint account, while Paxos limits redemption to fully verified customers. These practices illustrate existing controls but do not set a universal standard.

Potential Outcomes

If regulators adopt the ABA’s approach, account‑opening CIP would become the federal floor for any direct redemption, potentially raising compliance costs for smaller players. The Blockchain Association’s view would keep the CIP tied to primary‑market relationships and allow occasional non‑account redemptions or intermediary‑routed cash‑outs without onboarding every holder.

Until a final rule is issued, both positions remain advocacy positions rather than binding law.