The Blockchain Association has requested the United States Treasury Department to refine specific terms within its draft regulations that enact Section 3 of the GENIUS Act, which dictates who holds authorization to create, distribute, and market payment stablecoins domestically.
Within a 26-page submission published on Monday, this advocacy organization backed the fundamental strategy of the Treasury while demanding more precise boundaries regarding digital asset service providers (DASPs) classifications, “knowing participation” benchmarks, and regulations for overseas issuers.
The Treasury previously requested public input concerning its draft guidelines for the GENIUS Act, a foundational stablecoin statute enacted during the prior year that is scheduled to launch in January 2027. The window for public comments concluded on Monday, gathering a total of 123 filings, based on data from the federal regulatory portal.
The association stated that it backs the agency’s primary goal to guarantee that payment stablecoins remain secure, dependable, and generated by supervised entities holding sufficient backing reserves.
Clarifications
“We commend the Treasury’s execution efforts. Our filing requests sharper distinctions to ensure the definitive regulation aligns with congressional intent,” the coalition noted through a sequence of posts on X.
More precisely, the coalition advocated for better-defined parameters for DASPs, which dictate which commercial entities fall under specific stablecoin mandates.
“Lawmakers designed that classification for enterprises catering to consumers, while excluding foundational infrastructure like self-custody software and validators. Organizations transacting with their own holdings ought to be excluded,” according to the association.
The document additionally expressed worries regarding how the proposed framework handles “knowing participation” in unauthorized stablecoin distribution, a violation that could bring criminal consequences.
“Legal responsibility must demand genuine awareness and material assistance alongside the issuer,” the organization stated, noting that routine secondary-market exchanges should not amount to participation.
Foreign-issued stablecoins
The coalition also pressed for modifications to certain suggested compliance obligations. It argued that the Treasury should not obligate DASPs to execute “unbounded vetting” on offshore payment stablecoin creators in order to list those assets, given that numerous DASPs maintain zero direct ties with foreign creators.
As an alternative, the organization advised permitting DASPs to utilize publicly accessible restriction rosters maintained by regulators to satisfy verification requirements.
The filing additionally pushed the Treasury to substitute its suggested “reasonably concludes” benchmark—intended to ascertain whether a transaction partner resides in America—with a standard rooted in actual awareness and data obtained during normal operations.
It asserted that within trustless ecosystems, participants might “engage solely with a wallet address” without acquiring any supplementary details. Such a reality would render extra identification and geographic tracking mandates extremely difficult to execute, the document explained.
Originally published at https://www.theblock.co/news/regulation/2026-10-20-blockchain-association-clearer-rules-genius-act-421092.
