The Blockchain Association, a crypto industry trade group, is urging regulators to keep peer-to-peer transfers out of new stablecoin identity rules, wading into a joint federal rulemaking over which stablecoin transactions should trigger customer identity checks — and which should not.

Background: the joint rulemaking

The debate stems from a joint federal rulemaking on stablecoin issuers. The proposal would require issuers of permitted payment stablecoins to maintain a customer identification program, according to the Federal Register filing. A customer identification program is a set of rules that firms use to verify who their customers are. Such programs are a long-standing feature of traditional banking — U.S. banks have long been required to verify customer identity under the USA PATRIOT Act — so the proposal would extend a bank-style identity-check framework to stablecoin issuers.

The "permitted payment stablecoin" category itself comes from the GENIUS Act, the federal stablecoin law enacted in July 2025, which established a regulatory framework for payment stablecoins and left implementation details to rulemakings like this one.

The rulemaking was introduced earlier in the process by federal regulators, as reported by The Block.

What the Blockchain Association is asking for

The Blockchain Association, one of the crypto industry's main lobbying voices in Washington, wants the rules to exclude peer-to-peer transfers. A peer-to-peer transfer is a direct payment sent from one user to another, without a company sitting in the middle. The group laid out this view in a formal comment on the rulemaking, published on its website — the standard channel for industry and public input into a proposed federal rule. The core request is a carveout, meaning an exception that leaves certain transactions outside the ID requirement.

Why peer-to-peer transfers are the focus

The argument turns on the scope of the rule. Scope refers to how far the requirement reaches, and which transaction types it covers. Direct user-to-user transfers sit at the center of the debate because they do not involve an intermediary that would normally collect identification. Applying the same ID requirements to those transfers raises a practical compliance question: who is responsible for checking identity when no company is involved?

The Blockchain Association's broader work on this topic is outlined on its stablecoin policy page. The compliance debate here is about matching the rule to the transaction type, rather than treating every stablecoin transfer the same way.

What this could mean for the stablecoin policy debate

The industry position signals disagreement over how direct crypto transfers should be treated under the proposed rules. Identity and compliance rules have been a recurring theme across crypto policy this year, from expanded U.S. Treasury sanctions touching crypto to industry efforts to fight illicit activity such as the rise in deepfake scam losses. The stablecoin carveout request adds a new front to that ongoing conversation.

The stakes are shaped by how widely stablecoins are used. Tokens pegged to assets such as the U.S. dollar — led by Tether's USDT and Circle's USDC, the two largest by circulation — are among the most heavily transacted assets in crypto, moving value between exchanges, businesses, and individuals around the clock.

For a regular crypto holder, the practical stakes are straightforward. If the carveout is granted, sending stablecoins directly to another person could stay outside formal ID checks. If it is not, more everyday transfers could eventually face identity requirements. Nothing is final yet: under federal rulemaking procedure, regulators must review the submitted comments before issuing a final rule, and the outcome depends on how they respond.

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.