Jeremy Turner

I am writing to express my strong opposition to the proposed rule implementing Customer Identification Program (CIP) requirements for Permitted Payment Stablecoin Issuers (PPSIs). While the stated goal of these agencies is to counter illicit finance, this proposed framework represents a massive regulatory overreach, essentially using a "twenty-ton bomb" to address a problem that requires precision tweezers. By forcing strict, legacy banking identity verification onto decentralized technology, this rule threatens to stifle innovation, compromise user privacy, and undermine the fundamental purpose for which stablecoins and blockchain technology were invented: the frictionless, permissionless transfer of value. 1. Over Regulation and the Destruction of Technological Utility The core utility of blockchain technology and stablecoins is the ability to transfer value seamlessly across a distributed network. Forcing every participant whether a human user or an automated smart contract/bot, to be identified and pre-judged before they can even access a platform destroys this utility. Impact on Innovation: Digital asset platforms were designed to operate on the principle of permissionless innovation. Requiring upfront identity verification creates immense friction, effectively making the technology unusable for daily micro-transactions, automated protocols, and programmatic commerce. The Role of Automation: In the modern digital economy, value is frequently traded by automated software agents (bots). Forcing traditional KYC (Know Your Customer) frameworks onto non-human network participants demonstrates a fundamental misunderstanding of how this technology operates. Anyone, or anything, possessing legitimate value should be permitted to participate in the network. 2. Ineffectiveness Against Illicit Finance The proposed rule relies on the flawed assumption that strict identity verification will stop bad actors. In reality, sophisticated illicit actors and terrorists routinely utilize sophisticated spoofing methods, synthetic identities, and fake documentation to bypass traditional CIP/KYC checks. Consequently, these heavy handed mandates will not deter determined criminals. Instead, they will exclusively burden law-abiding everyday users who are forced to surrender sensitive data to comply with an ineffective bureaucratic hurdle. 3. Unwarranted Financial Surveillance and Violations of Privacy By mandating that PPSIs track, record, and maintain extensive personal data (names, dates of formation, identification numbers) tied to digital wallets, this rule establishes a framework for near total financial surveillance. Privacy Infringement: This data collection gives regulatory and enforcement bodies unprecedented visibility into private transactions. The free transfer of value within a community is a fundamental right; forcing users to choose between absolute government surveillance and financial exclusion is a direct violation of that privacy. Data Security Risks: Centralizing massive databases of personal identity information with stablecoin issuers creates incredibly lucrative targets for hackers, exposing millions of innocent citizens to identity theft and financial fraud. Conclusion and Alternative Approach The true underlying metric of any transactional network should be the validity of the asset being transferred, not the state-sanctioned identity of the entity transferring it. The sole requirement for participating in a stablecoin ecosystem should be whether the user possesses the value to transfer and whether that value is accepted by the platform. I urge FinCEN and the joint banking regulators to reconsider this approach. Rather than imposing an outdated, legacy-banking identity dragnet that over-regulates stablecoins out of existence, the agencies should utilize their exemption authority to protect the foundational privacy and utility of digital assets. Respectfully submitted