The Blockchain Association has asked the US Treasury to tighten the wording of its proposed rules under the GENIUS Act, the federal stablecoin law, arguing that several key terms are too broad.
In a 26-page letter filed Monday, the industry group backed the Treasury's core approach but called for clearer lines on the definition of digital asset service providers (DASPs), "knowing participation" standards, and foreign issuer requirements.
Liability and secondary market trading
A central request concerns criminal liability. The association argues that liability for participating in illegal stablecoin issuance should be premised on actual knowledge and substantial assistance in coordination with the issuer. The group also said ordinary secondary market trading should not count as knowing participation. It wants Treasury to distinguish new stablecoin issuance from secondary-market transfers, routine wallet movements and settlement activity.
On scope, the association wants software and infrastructure kept outside certain requirements. It recommended clarifying the scope of digital asset service providers to exclude self-custody software, validators and other infrastructure, as well as businesses that only trade their own assets. The letter also calls for clear exclusions covering liquidity providers operating decentralised systems.
The group said it supports the broader aim of the rule. It said it backs the objective of ensuring payment stablecoins are safe, trustworthy and issued by regulated companies that maintain adequate reserves. It also said the final rule should match what Congress wrote.
Where the rulemaking stands
Treasury's proposal implements section 3 of the GENIUS Act, covering the statutory prohibitions and limitations on payment stablecoin issuance, offer, and sale in the United States. Comments were due on or before October 19, 2026. The comment period closed with 123 submissions received, according to the federal regulations portal, as reported by The Block.
From its effective date of January 18, 2027, the Act will make it unlawful to issue a payment stablecoin in the United States without an appropriate federal or state license, according to Thomson Reuters. As of the close of the comment window, no final rule had been published by Treasury, the OCC, the FDIC or the Federal Reserve, according to the notice of proposed rulemaking.
Treasury must now review the submissions before finalising its rule. How far it narrows the definitions of service providers and knowing participation will matter for exchanges, wallet developers, validators and stablecoin issuers preparing for the January deadline.
Sources
The Block: Blockchain Association says Treasury's GENIUS Act rollout needs clearer DeFi, foreign issuer rules
Federal Register: GENIUS Act Regulations on Payment Stablecoin Issuance, Offer, and Sale
Thomson Reuters: Treasury proposes rules defining stablecoin issuance, sales in U.S.