Blockchain Association urges Treasury to clarify GENIUS Act rule

Key points

• Blockchain Association filed a 26-page letter on Oct. 19, per The Block
• Group wants self-custody software and validators excluded from DASP rules
• It opposes open-ended due diligence on foreign stablecoin issuers
• Comment period closed Oct. 19 with 123 submissions

The Blockchain Association, a crypto trade group, filed a comment letter on Monday, October 19, asking the U.S. Treasury Department to tighten definitions in its proposed rule implementing Section 3 of the GENIUS Act, the stablecoin law that governs who may issue, offer and sell payment stablecoins in the United States, according to The Block.

The association’s posted letter carries the October 19 date. The Block reported that the filing runs 26 pages and arrived on the last day of the public comment period, which drew 123 submissions.

What the group is asking Treasury to change

According to The Block, the group supports Treasury’s central aim of having stablecoins issued by regulated companies that hold adequate reserves. Its requests focus on how the rule would reach intermediaries and software.

• Digital asset service providers (DASPs): The group argues Congress meant the term to cover businesses that serve customers. It wants core infrastructure such as self-custody software and validators excluded, along with firms that trade only their own assets. The Block quoted the group as saying such firms “shouldn’t be swept in.”
• Knowing participation: The association is concerned that the proposed treatment of knowing participation in unlawful stablecoin issuance could carry criminal penalties. It wants liability to require actual knowledge and substantial assistance coordinated with the issuer, and says ordinary secondary-market trading should not count.
• Foreign issuers: The group opposes “open-ended due diligence” on foreign issuers, noting that many DASPs have no direct relationship with them. It proposes that DASPs be allowed to rely on publicly available prohibition lists published by regulators.

Why permissionless systems are a sticking point

The letter also objects to a “reasonably believes” standard in the proposal. The Block reported that the group wants it replaced with a test based on actual knowledge and information gathered in the ordinary course of business.

The group’s reasoning, as The Block described it, is that participants in permissionless environments may interact with nothing more than a wallet address. That makes identification and geolocation requirements difficult to put into practice, the group argues.

The positions echo earlier advocacy by the association. In comments on Treasury’s earlier advance notice, it argued that the law’s yield restrictions should apply to issuers rather than to third-party platforms such as DeFi protocols, and that Treasury should respect exclusions Congress created for protocol developers and liquidity providers, according to a legal-industry summary of that filing.

In a post on X, the group said it applauds Treasury’s implementation work and that its letter seeks “clearer lines so the final rule matches what Congress wrote,” according to The Block.

What happens next

Treasury issued the proposed rule on August 17, 2026, and the comment period closed October 19. The department will review the submissions before issuing a final rule. The Block reported that the GENIUS Act, signed into law in 2025, is expected to take effect in January 2027. Comments are collected in the federal docket on regulations.gov.

Treasury has not yet said when it expects to finalize the rule. The proposal also includes a safe harbor for offshore issuance, according to a separate summary of the August proposal, which is among the provisions commenters have focused on.