Fed Reserve claims stablecoin companies to verify customer IDs

The Federal Reserve has issued a new proposal that would require issuers of stablecoins used for payments to implement effective customer due diligence programs, reflecting a growing regulatory trend toward integrating digital assets into the traditional financial oversight framework.

The US central bank explained in a statement Thursday that these requirements would closely resemble the "know your customer" procedures applied to banks, aiming to curb illicit activities and enhance transparency in the stablecoin market.

The Fed noted that the proposal was developed in coordination with four other regulatory bodies and is open for public comment for 60 days following its official publication in the Federal Register, as part of a legislative process to establish a more robust regulatory framework for this growing sector.