Coin Center filed a response to FinCEN and OFAC on how stablecoin issuer AML rules should be implemented under the GENIUS Act.
They argue that payment stablecoins could become "the backbone of an identity-linked financial surveillance system more comprehensive than anything possible in traditional banking" if the rules are written too broadly.
They urge regulators to limit AML obligations to the issuer-customer relationship and not extend them to monitoring peer-to-peer transfers on public blockchains.
They also argue that overcollecting personal data creates honeypots for hackers and intelligence targets for adversaries, which they say undermines the stated goal of combating financial crime.
They argue that payment stablecoins could become "the backbone of an identity-linked financial surveillance system more comprehensive than anything possible in traditional banking" if the rules are written too broadly.
They urge regulators to limit AML obligations to the issuer-customer relationship and not extend them to monitoring peer-to-peer transfers on public blockchains.
They also argue that overcollecting personal data creates honeypots for hackers and intelligence targets for adversaries, which they say undermines the stated goal of combating financial crime.
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