The crypto advocacy group Blockchain Association is urging federal regulators to keep identity checks limited to direct relationships between stablecoin issuers and their customers, warning that extending the requirements to peer-to-peer transfers could “cripple the industry.”

In an August 21 comment letter, addressed to the Financial Crimes Enforcement Network, the Office of the Comptroller of the Currency, the Federal Reserve, the Federal Deposit Insurance Corporation, and the National Credit Union Administration, the crypto group responded to customer identification rules proposed by five federal financial regulators under the Guiding and Establishing National Innovation for U.S. Stablecoins, or GENIUS Act.