Blockchain Association backs Treasury's proposed KYC limits under GENIUS Act
DeFi & Yields ·
The industry group supports rules that would apply know-your-customer checks specifically to direct issuer-to-customer transactions in stablecoin primary markets.
The Blockchain Association has endorsed Treasury's stablecoin framework under the GENIUS Act, according to The Block. The framework would impose KYC requirements on transactions occurring directly between stablecoin issuers and customers in primary markets, rather than applying blanket verification across all stablecoin activity.
The distinction matters because it narrows where identity verification obligations attach. Primary-market issuance—when a customer obtains newly minted stablecoins directly from the issuer—would trigger KYC checks, while secondary-market activity, such as trading stablecoins peer-to-peer or on exchanges after issuance, would not automatically fall under the same requirement. This mirrors a broader pattern in crypto compliance, where regulators and industry groups have sought to concentrate identity checks at points of on- and off-ramping rather than at every layer of onchain activity.
The Blockchain Association's position aligns with how virtual asset service providers already operate under existing anti-money laundering and counter-terrorist financing frameworks. Centralized exchanges, custodial wallets and similar entities are generally required to verify customer identity before allowing platform use, and to maintain ongoing due diligence. Applying a comparable standard to issuer-customer transactions in stablecoin primary markets would extend that logic to a corner of the market that has, until now, lacked a settled regulatory treatment.
The endorsement comes as KYC enforcement approaches vary widely across the broader crypto sector. Some platforms have built products explicitly around avoiding identity checks, while others have scaled back verification requirements for narrower product lines. Against that backdrop, the Blockchain Association's support for targeted, transaction-specific KYC under GENIUS Act suggests an attempt to draw a workable line between primary issuance, where issuer accountability is clearest, and downstream trading activity, where imposing the same standard would be harder to enforce.
What remains unclear is how Treasury will finalize the scope of the rule, including whether "direct issuer-to-customer" will be defined narrowly enough to exclude intermediated purchases through exchanges or brokers, and how compliance costs might be distributed among smaller stablecoin issuers versus larger ones. It is also not yet known when Treasury expects to move from framework to formal rulemaking, or whether other industry groups will weigh in with competing proposals before that happens.