TL;DR: The Blockchain Association has urged the US Treasury to draw clearer lines around DeFi software, foreign stablecoin issuers and who could face liability under proposed GENIUS Act rules.
The fight over US stablecoin regulation is shifting from Congress to the details of implementation. In comments on Treasury’s proposed Section 3 rules under the GENIUS Act, the Blockchain Association has argued that a framework designed for regulated payment issuers should not inadvertently catch unrelated software and market participants.
One sticking point is the definition of a digital asset service provider. The association wants officials to distinguish customer-facing financial businesses from infrastructure such as self-custody software and validators that do not provide the same services.
It also disputes how the rules might define knowing participation in unlawful stablecoin issuance. Its position is that enforcement should require genuine knowledge and meaningful assistance, rather than interpreting ordinary secondary-market activity as evidence of involvement.
Foreign-issued stablecoins are another concern. The group says compliance requirements should rely on accessible regulatory information rather than assuming every service provider can investigate an issuer with which it has no direct relationship.
These are advocacy positions, not changes Treasury has adopted. Regulators still have to balance the industry’s request for workable rules against their responsibility to police payment products and financial crime.
The eventual language will help determine whether GENIUS Act compliance is mostly a challenge for stablecoin issuers or one that reaches much further into the surrounding ecosystem.
Written by the News Desk and edited by Samuel Rae.