The Blockchain Association has formally pushed the U.S. Treasury Department to sharpen its proposed rules for implementing Section 3 of the GENIUS Act, the landmark stablecoin legislation signed into law last year and expected to take effect in January 2027.
In a 26-page comment letter filed Monday, the Washington-based advocacy group said it supports the Treasury’s core objective of ensuring payment stablecoins are safe, trustworthy, and issued by regulated companies holding adequate reserves. However, it warned that several definitions and standards in the proposal need clearer lines to match congressional intent.
The association specifically urged Treasury to clarify the definition of digital asset service providers, or DASPs, so that core infrastructure such as self-custody software and validators is not swept into stablecoin rules. It also asked that firms trading their own assets not be treated as DASPs.
On enforcement, the group argued that liability for unlawful stablecoin issuance should require actual knowledge and substantial assistance in coordination with the issuer, and that ordinary secondary-market trading should not count as participation. The letter also called on Treasury to replace its "reasonably believes" standard for identifying U.S. counterparties with a standard based on actual knowledge and ordinary-course information, noting that in permissionless environments users may interact only with a wallet address.
For foreign-issued stablecoins, the association recommended that DASPs be allowed to rely on regulators’ publicly available prohibition lists rather than conducting open-ended due diligence on foreign issuers. It further asked Treasury to rule out an open-ended "functional equivalent" test for monetary value and to revisit cost estimates.
The public comment period closed Monday with 123 submissions, according to the federal regulations portal. The outcome could shape the U.S. stablecoin landscape, influencing institutional participation and expectations for issuers such as USDC and USDT as the January 2027 effective date approaches.
