The Blockchain Association urged the U.S. Treasury Department to clarify proposed rules implementing Section 3 of the GENIUS Act. Section 3 governs who can issue, offer and sell payment stablecoins in the United States. The industry group filed a 26-page letter on Monday supporting Treasury's core approach while seeking clearer definitions, liability standards and foreign issuer requirements.
Treasury sought public feedback on the proposed regulations implementing the GENIUS Act, which was signed into law last year and is expected to take effect in January 2027. The public comment period closed on Monday with 123 submissions, according to the federal regulations portal. The association said the association supports Treasury's objective of ensuring payment stablecoins are safe, trustworthy and issued by regulated companies maintaining adequate reserves. The group said the final rule should match what Congress wrote.
The association called for clearer definitions of digital asset service providers (DASPs), which determine which businesses face certain stablecoin rules. The association said Congress wrote the definition for businesses serving customers and excluded core infrastructure such as self-custody software and validators. The association argued that firms trading their own assets should not fall within the definition.
The letter raised concerns about the proposed treatment of knowing participation in unlawful stablecoin issuance, which could carry criminal penalties. The association said liability should require actual knowledge and substantial assistance in coordination with the issuer. The group said ordinary secondary-market trading should not constitute participation.
The association argued that Treasury should not require DASPs to conduct open-ended due diligence on foreign payment stablecoin issuers before offering those issuers' stablecoins. The association said many DASPs lack any direct relationship with foreign issuers. The group recommended allowing DASPs to rely on regulators' publicly available prohibition lists to meet due diligence obligations.
The letter urged Treasury to replace the proposed "reasonably believes" standard for determining whether a counterparty is located in the United States. The association recommended a standard based on actual knowledge and information gathered in the ordinary course. The letter argued that participants in permissionless environments may interact only with a wallet address and receive no further information. The letter said that limitation would make additional identification and geolocation requirements difficult to implement.
Blockchain Association Calls for Clarity on DeFi and Foreign Issuer Rules in GENIUS Act Rollout
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Summary
The Blockchain Association has called for clarity on cryptocurrency rules under Section 3 of the GENIUS Act, which addresses payment stablecoin issuance. The group submitted a 26-page letter to the U.S. Treasury, supporting its core approach but urging clearer definitions and foreign issuer requirements. On-chain news shows the public comment period closed Monday with 123 submissions.
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