The Federal Reserve just fired the starting gun on what could become the most consequential regulatory shift for stablecoins since, well, ever. In a June 2026 notice of proposed rulemaking, the central bank laid out requirements for permitted payment stablecoin issuers, or PPSIs, to establish formal customer identification programs.
The proposal implements anti-money laundering provisions baked into the GENIUS Act, the landmark legislation enacted on July 18, 2025, that created the first federal regulatory framework specifically designed for payment stablecoins. Jerome Powell voiced support for the new rules. Kevin Warsh, who was confirmed as Fed Chair in May 2026, abstained from the vote.
What the rules actually require
Under the proposed framework, PPSIs would need to build out customer identification programs, commonly known as CIPs. The GENIUS Act itself goes further than just customer screening. PPSIs are required to hold reserves in high-quality liquid assets on a strict 1:1 basis. Issuers must also maintain rapid redemption policies. One notable restriction: PPSIs are prohibited from offering interest or yield to token holders.
The Fed isn’t working alone here. Treasury, FinCEN, and OFAC have issued joint proposals targeting AML and sanctions compliance for stablecoin operations. The National Credit Union Administration separately proposed its own standards for PPSIs on May 15, 2026, with a public comment period running through July 17, 2026.
