Blockchain Association asks Treasury for clearer DeFi and foreign issuer rules under GENIUS Act

Blockchain Association pushes back on parts of Treasury's stablecoin rule

The Blockchain Association, a crypto industry group, has asked the U.S. Treasury Department to make key parts of its proposed stablecoin rules clearer. The rules would carry out Section 3 of the GENIUS Act, a law that decides who can issue, offer, and sell payment stablecoins in the United States.

A stablecoin is a crypto token designed to keep a steady value, usually tied to the U.S. dollar. The group filed a 26-page letter on Monday, the last day of the public comment period on the proposal.

What the association supports and what it wants changed

The group said it backs Treasury's main goal: making sure payment stablecoins are safe, trustworthy, and issued by regulated companies that hold enough reserves. But it wants the final rule to draw clearer lines in three areas.

• The definition of digital asset service providers (DASPs): the association says this determines which businesses fall under certain stablecoin rules. It argues that self-custody software and validators are core infrastructure and should be left out, and that firms trading their own assets should not be included.
• "Knowing participation" in unlawful stablecoin issuance: the group says liability should require actual knowledge and substantial help given alongside the issuer. Ordinary secondary-market trading should not count as participation, it said. The proposed standard could carry criminal penalties.
• Due diligence on foreign issuers: the association says DASPs should not face open-ended checks on foreign payment stablecoin issuers, since many DASPs have no direct relationship with them. It suggests letting DASPs rely on regulators' public prohibition lists instead.

Concerns about identifying users in permissionless systems

The association also asked Treasury to replace its proposed "reasonably believes" standard, used to judge whether a counterparty is in the U.S., with one based on actual knowledge and information gathered in the normal course of business. It said that in permissionless environments, a participant may only interact with a wallet address and get no other information, which makes extra identification and location checks hard to carry out.

Where the GENIUS Act process stands

Treasury sought public feedback on the proposed regulations in August 2026. The GENIUS Act was signed into law in 2025 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.

What is confirmed

• The Blockchain Association filed a 26-page comment letter on Treasury's proposed rule for Section 3 of the GENIUS Act.
• The letter was filed Monday, the day the comment period closed.
• The federal portal shows 123 submissions on the proposal.
• The association supports Treasury's core approach but wants changes to the DASP definition, the "knowing participation" standard, and foreign issuer due diligence.

What the public record does not settle

The supplied material does not show how Treasury responded to the letter or whether it plans to adopt any of the requested changes. It also does not state when a final rule will be issued.

Why this matters

The final rule will decide which companies must follow stablecoin rules in the U.S. and what obligations they carry when dealing with foreign issuers. How the DASP definition, liability standard, and due diligence duties are written will shape who is covered, including builders of self-custody tools and trading platforms.

Sources

• The Block