The US Proposed New KYC Rules for Stablecoins

The US Federal Reserve and other regulators on June 22, 2026 proposed a mandatory customer identification program for issuers of payment stablecoins. These are new KYC rules for stablecoins, and they are meant to tighten oversight of a market that has already reached $317.43 billion, with daily trading volume at $65.88 billion.

The document implements the provisions of the GENIUS Act and opens a 60-day public comment period after publication in the Federal Register on June 22, 2026. For Ukrainian traders and stablecoin holders, the message is simple: the US wants to make issuers look more like traditional financial institutions, not a gray zone of digital transfers.

What exactly are the new rules changing?

Regulators propose to treat permitted issuers of payment stablecoins, or PPSI, as financial institutions under the Bank Secrecy Act. That means a written customer identification program, identity verification using a risk-based approach, retention of verification results, and screening against lists of persons and organizations linked to terrorism.

Separate procedures are set out for cases where a person cannot be verified. Issuers will also be allowed to rely on the infrastructure of parent banks or on checks performed by other regulated financial institutions, if AML/CFT control requirements are met. This is not a minor tweak. It is an attempt to build stablecoins into familiar banking logic.

In our article about new crypto registries, a similar trend is already visible: governments are increasingly targeting not the technology itself, but the on- and off-ramps. The logic here is the same, only on an American scale.

Why does this matter right now?

The Fed is not hiding the reason. Supervision chief Michael Barr said directly that current mechanisms are not enough to combat illicit activity in digital assets. His quote sounds harsh, but in essence it is about a simple point: if an issuer does not know its customer, it becomes much harder to trace the transaction chain.

"Although some digital asset providers are subject to anti-money laundering and counter-terrorism financing requirements in their jurisdictions, bad actors still find it too easy to bypass these restrictions and operate unnoticed in digital asset transactions."

There is another nuance. Regulators themselves acknowledge that about 99% of stablecoin activity takes place on the secondary market, not during the initial issuance of the token. For the four largest payment stablecoins, FinCEN estimated the share of on-chain volume at only about 35%. In other words, the new CIP rule hits an important part of the market, but not the whole market.

Market reaction

On paper, the regulatory pressure looks tough, but the stablecoin segment has long been under close scrutiny. According to market tracker data, the largest asset in the category, USDT, has a market cap of $186.31 billion, USDC $74.9 billion, DAI $5.36 billion, and USD1 $4.72 billion. These are big numbers. And that is exactly why regulators are taking a structural step rather than a symbolic one.

It is also important that the authors of the rule calculated its scale. Over the first three years, they expect about 50 PPSI, including 20 non-bank entities and 30 subsidiaries of depository institutions. The average issuer will have 1,000 customers and 650 new customers per year, while the total cost of compliance is estimated at $1.68 million in the first year and $1.64 million annually thereafter. That is not trivial for a small player, but it is also not a barrier that will stop the entire market.

There is both upside and pressure in this picture. JPMorgan previously estimated the stablecoin market could reach $500 billion-$600 billion by 2028, while Moody’s does not see them as a significant threat to traditional banking. So the market is growing, but the rules are getting stricter. That is exactly what the next phase for major payment tokens looks like.

• The document will be published in the Federal Register on June 22, 2026.

• After that, a 60-day comment period will open.

• PPSI issuers are to be treated as financial institutions under the Bank Secrecy Act.

• Regulators expect about 50 PPSI in the first 3 years.

• According to the Fed, the average issuer will have 1,000 customers and 650 new customers per year.

• The total cost of compliance is estimated at $1.68 million in the first year.

What does this mean for investors?

For those holding stablecoins, the main takeaway is simple: the US is not banning the segment, but trying to bring it closer to banking standards. This usually reduces regulatory chaos, but it increases issuer costs and pressure on smaller teams that do not have ready-made compliance infrastructure.

For traders, this means that major tokens like USDT and USDC will most likely become even more firmly established as the basic settlement tool. But the new rules may speed up the elimination of weak projects, because not every issuer will be able to handle checks, reporting, and procedures for cases involving an unidentified person. And that is no longer theory, but a direct consequence of KYC and AML requirements.

There is also a broader signal for Ukraine. If the US aligns stablecoins with banking supervision, similar frameworks may become more active in other jurisdictions as well. In practice, that means more checks at the entry point, but also fewer chances that major payment tokens will fall out of the legal financial circulation.

Those who want to quickly sell USDT TRC20 for hryvnia to a card can do so without extra steps if the market starts reacting nervously to compliance news.

Frequently asked questions

When will the new rules for stablecoin issuers be opened for discussion?

After publication in the Federal Register on June 22, 2026, the document will be opened for public comment for 60 days. This is a standard stage when the market, lawyers, and banks can submit their remarks.

Do the new requirements mean a ban on stablecoins in the US?

No. This is not about a ban, but about tightening the rules for issuers, who are to be treated as financial institutions under the Bank Secrecy Act. In other words, the market remains, but it is brought under stricter control.

What is the current scale of the stablecoin market?

According to market tracker data, the category’s market cap is $317.43 billion, and daily trading volume is $65.88 billion. The largest assets on the list are USDT at $186.31 billion and USDC at $74.9 billion, so regulatory pressure will affect them the most.

The US is making stablecoins look more like a banking product, and this is no longer a short news item, but a new framework for the entire segment. If you need to convert coins into hryvnia without extra noise, it is convenient to sell USDT TRC20 for hryvnia to a card.

This material is not financial advice. Cryptocurrency trading involves significant risks. Part of this text was prepared with the help of artificial intelligence based on public sources and reviewed by our editorial team.