According to Berenberg analyst Mark Palmer, a recent amendment to the National Defense Authorization Act (NDAA) of 2024 has the potential to create difficulties for stablecoin issuers like USDC (USD Coin). The amendment aims to introduce new Know Your Customer (KYC) and anti-money laundering measures for crypto-assets. These measures would require stablecoin issuers to comply with vetting standards set by the U.S. Secretary of the Treasury to ensure adherence to money laundering and sanctioning laws. The implementation of these measures, if included in the final version of the NDAA, could pose challenges for stablecoin issuers.

Palmer highlights a key concern, explaining that stablecoin holders' identities can only be ascertained at the time of issuance and redemption. This limitation could lead to a negative impact on USDC's market capitalization. Additionally, Coinbase, which earned 27% of its net income from USDC's interest income in the first quarter of this year, may also face issues if the amendment is retained.

In summary, the proposed amendment to the NDAA could potentially create hurdles for stablecoin issuers like USDC, as it may be difficult for them to comply with the new KYC and anti-money laundering measures. This could result in a negative impact on USDC's market performance and may affect Coinbase's revenue streams tied to USDC.