The Federal Reserve on Thursday proposed new rules requiring U.S. crypto firms to verify stablecoin users' identities, aiming to prevent money laundering. The rulemaking, joint with the Treasury and FDIC, interprets customer identification requirements of the GENIUS Act, which legalized stablecoins last summer. All Fed governors voted in favor except President Trump's new Fed Chair Kevin Warsh, who abstained without explanation. The rules mandate that 'digital asset service providers'—businesses exchanging, transferring, or custodying crypto—collect names, birthdates, addresses, and cross-check with U.S. government blacklists. Decentralized protocols are exempt, a feature criticized by Fed Governor Michael Barr, who cited concerns about illicit finance in secondary market transactions of stablecoins despite voting for the proposal. The proposal enters a 60-day public comment period.

Key facts

• Fed proposes stablecoin rules requiring customer identity verification to combat money laundering.
• New Fed Chair Kevin Warsh abstains from voting without providing a reason.
• Decentralized protocol exemption raises concerns about illicit finance in secondary markets.
• Rules derived from GENIUS Act; public comment period opens for 60 days.