Peer-to-Peer Stablecoin Transfers Should Skip ID Rules, Industry Group Argues
The industry group warns that broad identification requirements could otherwise sweep in nearly every stablecoin transaction.
The Blockchain Association, a Washington-based crypto industry group, has called for stablecoin identification rules to carve out peer-to-peer transfers. The group argues that requiring identity checks on wallet-to-wallet transactions would extend far beyond the intent of existing anti-money-laundering frameworks. Crypto.news reported the group’s position on August 25.
Stablecoin identification rules are part of a broader regulatory push following the passage of federal stablecoin legislation in the United States. Regulators have been working through how issuers, exchanges, and other intermediaries must verify the identities of parties involved in stablecoin transfers. The debate now centers on whether that obligation should extend to transfers that never touch a regulated platform.
Most anti-money-laundering regimes, including the Travel Rule framework used internationally, apply to virtual asset service providers such as exchanges and custodians. They generally do not reach direct wallet-to-wallet transfers where no intermediary is involved. The Blockchain Association’s position is that stablecoin rules should follow this same structure rather than impose identification requirements on self-custody activity.
The Cryptonomist reported that, under a broad reading of the proposed rules, roughly 99% of all stablecoin transactions could technically fall under identification requirements. That figure reflects the reality that a large share of stablecoin transfer volume happens directly between wallets, without passing through an exchange or custodian at the point of transfer. If regulators applied identification mandates to that entire volume, compliance burdens would extend well beyond centralized platforms.
Industry groups have consistently argued that self-custody wallets differ fundamentally from custodial services. A wallet holder moving stablecoins to another wallet is not necessarily interacting with a business subject to licensing or reporting obligations. Treating every such transfer as requiring identification, the Blockchain Association contends, would be difficult to enforce and could push activity toward less transparent channels.
Stablecoins have grown into one of the largest segments of the digital asset market, used for payments, trading collateral, and cross-border settlement. Issuers such as Tether and Circle, along with the exchanges that list their tokens, have a direct stake in how identification obligations are drawn. Overly broad rules could raise compliance costs across the industry, while narrower rules focused on intermediaries would preserve current practices for most exchange-based activity.
Regulators have not finalized how stablecoin identification requirements will be scoped. The discussion reported by crypto.news and the Cryptonomist reflects an active lobbying effort by industry participants to shape that outcome before rules are set. The final scope will likely determine how much of the stablecoin ecosystem falls under new reporting obligations.
Sources disagree on this story
This article was published before the reports below were compared. The reporting above stands; what follows is where the published accounts do not agree.
Reports agree the Blockchain Association urged regulators to exclude peer-to-peer stablecoin transfers from GENIUS Act identification rules, but disagree on when the comment letter was submitted.
What all sources agree on
- Five federal agencies — FinCEN, the OCC, the Federal Reserve, the FDIC and the NCUA — jointly proposed customer identification standards for payment stablecoin issuers in June 2026.
- The Blockchain Association supports limiting customer identification requirements to direct primary-market issuer-customer relationships and excluding peer-to-peer/secondary-market transfers.
- Regulators estimate approximately 99% of stablecoin transaction activity occurs in secondary markets.
- Final rules would take effect 12 months after publication, and the GENIUS Act’s broader licensing framework is set to restrict unlicensed issuance starting January 18, 2027.
Where the reports disagree
1Date the Blockchain Association submitted its comment letter
The industry group filed its comments by the Aug. 21 deadline and summarized its position on Aug. 24.
The Blockchain Association filed its formal comments by the August 21 deadline and laid out its position publicly on August 24.
The letter was submitted on Friday, August 22, in response to the joint proposal developed by the Treasury’s Financial Crimes Enforcement Network (FinCEN), the Office of the Comptroller of the Currency (OCC), the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the National Credit Union Administration (NCUA).
What would settle it: The Blockchain Association’s publicly filed comment letter with its official submission timestamp, or the agencies’ public docket record of receipt.
What to make of it
Treat the substance of the Blockchain Association’s position — supporting primary-market identification checks while opposing extension to peer-to-peer transfers — as established across all three reports. Treat the exact submission date (Aug 21 vs Aug 22) as unresolved until checked against the agencies’ public comment docket.
Market Impact
If regulators adopt the Blockchain Association’s proposed carve-out, exchanges and custodial platforms would likely bear the bulk of new identification obligations, leaving direct wallet transfers largely untouched. That outcome would minimize disruption to self-custody use cases, which make up a large share of stablecoin transfer volume according to the Cryptonomist’s reporting.
Conversely, a broader rule capturing peer-to-peer activity could raise compliance costs for wallet providers and complicate stablecoin usability for retail and institutional users alike. Stablecoin issuers, payment processors, and exchanges are likely to continue advocating for a narrower scope as rulemaking proceeds.
The outcome of this rulemaking debate will shape how much of the stablecoin market falls under identification requirements going forward.
Frequently Asked Questions
What is the Blockchain Association asking regulators to do?
It wants stablecoin identification rules to exclude peer-to-peer transfers between self-custody wallets, according to crypto.news.
Why does the 99% figure matter?
The Cryptonomist reported that a broad application of the proposed rules could theoretically cover nearly all stablecoin transactions, since most transfers happen wallet-to-wallet without an intermediary.
How do current anti-money-laundering rules typically treat wallet transfers?
Frameworks like the Travel Rule generally apply to regulated intermediaries such as exchanges and custodians, not direct transfers between self-custody wallets.
Has a final rule been set?
No. The reporting reflects an ongoing industry effort to influence the scope of identification requirements before rules are finalized.
Original source: AltcoinGordon
Syndicated coverage. Originally reported by altcoingordon.com.
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