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Bank lobby urges stablecoin redeemers to open accounts first
The dispute over stablecoin issuer customer identification programs centers on whether a direct redemption with an issuer should automatically trigger customer onboarding for self-custody holders.
The American Bankers Association is pressing US regulators to require stablecoin buyers and redeemers to open an account and complete customer identification when they transact directly with a payment stablecoin issuer, a move it says would apply even when the holder starts from self-custody.
According to CryptoSlate, the Blockchain Association is arguing against making every direct, one-off cash-out or redemption routed through a regulated intermediary count as issuer customer onboarding, saying identity checks should apply only to holders who are already direct primary-market account customers.
The disagreement emerged in comments on a joint federal proposal for stablecoin issuer customer identification programs, known as CIPs, and the agencies will ultimately determine whether requesting dollars from an issuer always opens an account or whether some holders can redeem without establishing an issuer relationship.
The proposal would require permitted payment stablecoin issuers to operate CIPs, and regulators specifically asked commenters whether a direct redemption by a holder with no prior issuer relationship creates an account, leaving the issue unsettled in the draft.