US Regulators Greenlight Digital Credentials for Bank CIP
A new joint statement from FinCEN and federal banking agencies confirms that financial institutions may use verifiable digital credentials as part of their Customer Identification Programs under the Bank Secrecy Act.
US financial regulators have formally approved the use of verifiable digital credentials for customer identification. In a joint statement on September 8, 2026, the Financial Crimes Enforcement Network (FinCEN), the Federal Reserve, the FDIC, and the NCUA clarified that banks and other financial institutions may incorporate this technology into their Customer Identification Programs (CIPs) to comply with the Bank Secrecy Act. This development provides long-awaited regulatory certainty for institutions seeking to modernize their onboarding and verification processes. By using secure and verifiable digital IDs, firms can potentially reduce the risk of identity fraud, streamline customer onboarding, and create more efficient compliance workflows. The regulators' endorsement signals a significant step toward embracing technology to enhance anti-money laundering and know-your-customer controls. Counsel for financial institutions should now assess the opportunities and risks of adopting digital credentialing systems and watch for any follow-on technical guidance from the agencies concerning implementation standards or supervisory expectations.