The GENIUS Act is getting additional industry support as the Blockchain Association expresses its support for the proposed stablecoin issuer regulations in the U.S., calling for better clarity and practicality of compliance requirements.
The industry organization filed a comment letter on Friday in response to the proposals from the Financial Crimes Enforcement Network, the Office of the Comptroller of the Currency, the Federal Reserve, the Federal Deposit Insurance Corporation, and the National Credit Union Administration.
The GENIUS Act developed a federal system for payment stablecoins, specifying which entities are allowed to issue them, which assets should support them, and how customers may redeem their coins.
According to the legislation, approved issuers of payment stablecoins have to establish a reliable system of customer identification (CIP).
The Blockchain Association believes that the scope of identification should be limited to primary market transactions between a stablecoin issuer and a customer.
This means that regular peer-to-peer transactions and other secondary market transactions will mostly not fall under the CIP duties of the stablecoin issuer.
This is because this arrangement would shield issuers from having to ascertain the identity of those who make transactions that take place after issuing a stablecoin.
Also Read | DOGE Crash: CleanCore’s Brutal $33.4M Exit Ends Treasury
GENIUS Act Rules Need Clearer Definitions
The Blockchain Association also called on regulators to give clear definitions of such terms as “account,” “customer,” and “digital asset service provider.”
It was suggested that redemptions made only once and activities unrelated to the provision of stablecoin services be exempt from regulation. It was also stressed that compliance requirements for issuers must not overlap.
The organization further stated that the stablecoin companies will have enough latitude when verifying their clients’ information insofar as they satisfy the standards laid out by the GENIUS Act.
It is also recommended that the federal bodies coordinate the implementation date of the proposed CIP regulations and the AML standards to be outlined in the legislation.
Industry Pushes for Practical Stablecoin Regulation
In a statement, the Blockchain Association expressed the importance of the GENIUS Act as a critical first step towards the regulation of payment stablecoins in the United States. However, it emphasized that its implementation must safeguard the users’ interests and let businesses proceed with innovation.
These remarks follow in the wake of ongoing efforts by the American authorities to formulate concrete regulations based on the GENIUS Act.
The framework, when ready, can be pivotal in defining the operating conditions for stablecoin issuers in the United States.
Also Read | Ethereum Bullish Surge as BitMine Buys $81M in Top Week
