Blockchain Association Urges Treasury to Clarify GENIUS Act Stablecoin Rules

The Blockchain Association has asked the US Treasury to clarify its proposed rule implementing Section 3 of the GENIUS Act, which governs who can issue and sell payment stablecoins. In a 26-page letter filed Monday, the group backed Treasury’s core approach but wanted clearer lines on service provider definitions, “knowing participation” standards and foreign issuer requirements. The comment period closed with 123 submissions, and the law is expected to take effect in January 2027.

Digital Asset Service Provider Definition

The group said Congress wrote the definition for businesses serving customers and excluded core infrastructure such as self-custody software and validators. It argued that firms trading their own assets should not be swept in.

Knowing Participation and Criminal Liability

Because unlawful participation in stablecoin issuance could carry criminal penalties, the association said liability should require actual knowledge and substantial assistance in coordination with the issuer. Ordinary secondary market trading, it added, should not count.

Foreign Stablecoin Issuer Rules

The group opposed open ended due diligence on foreign issuers and suggested letting providers rely on regulators’ public prohibition lists. It also asked Treasury to replace the “reasonably believes” standard for spotting US counterparties with one based on actual knowledge, noting that in permissionless settings users may only see a wallet address.