The Federal Reserve advances customer verification rules for crypto firms under the GENIUS Act, with one governor abstaining.
The Federal Reserve proposed new rules requiring U.S. crypto firms to verify stablecoin users, aiming to curb money laundering risks. The proposal, issued jointly with Treasury and FDIC, implements provisions of the GENIUS Act, which legalized stablecoins last year.
All Fed governors except Chair Kevin Warsh supported the rulemaking. Former Chair Jerome Powell backed the measure, while Warsh abstained without explanation. The rules exempt decentralized protocols, drawing warnings from some officials about potential risks.
The proposal defines digital asset service providers as entities exchanging, transferring, or custodying crypto, mandating customer identification precautions.