Blockchain Association Urges US Treasury to Clarify GENIUS Act Rules

The Blockchain Association has urged the US Treasury Department to clarify key provisions in rules implementing the GENIUS Act, the stablecoin law.

The group submitted a 26-page comment letter on Oct. 20, crypto-focused media outlet The Block reported. It backed the Treasury's overall approach while calling for more specific standards on the definition of digital asset service providers, or DASPs, the threshold for "knowing participation," and requirements for foreign issuers.

The Treasury had sought public comment on proposed rules to implement Section 3 of the GENIUS Act, which was enacted last year, and the comment period closed on Oct. 20. A total of 123 submissions were filed, according to the federal rulemaking portal. The GENIUS Act governs the issuance and sale of payment stablecoins in the US and is scheduled to take effect in January 2027.

In a post on X, the Blockchain Association said it supports the Treasury's implementation effort. The letter aims to set clear standards so the final rule aligns with what Congress enacted.

The group raised particular concern about the scope of the DASP definition. Congress created the definition for businesses that serve customers while excluding core infrastructure such as self-custody software and validators, the association said. Firms that trade only their own assets should not fall under the rule.

The association also addressed the "knowing participation" provision, which could lead to criminal penalties. Liability should require actual knowledge and meaningful assistance comparable to collusion with an issuer, it said. Ordinary secondary-market trading should not be treated as participation.

The group also called for changes to due-diligence requirements tied to foreign-issued stablecoins. Many DASPs do not have direct relationships with foreign issuers, the association said, and they should be allowed to meet their obligations by using a prohibited list published by regulators instead of an open-ended due-diligence requirement. It also urged the Treasury to replace the proposed "reasonable belief" standard for determining a counterparty's location with one based on actual knowledge and ordinary information gathering.