TL;DR
Blockchain Association supports Treasury’s proposed GENIUS Act framework but asks for narrower definitions covering digital asset service providers, issuers, secondary-market activity and unlawful participation.
The group wants clearer exclusions for validators, self-custodial software, DeFi liquidity mechanisms and stable-value assets that fall outside the statutory payment-stablecoin definition.
It also seeks rules for foreign issuers, geographic standards and coordinated effective dates, while stressing that its recommendations concern a proposal not final regulation.
The Blockchain Association is asking the U.S. Treasury to clarify definitions in proposed rules implementing Section 3 of the GENIUS Act. In an October 19 comment letter , the group said it supports Treasury’s framework but wants boundaries for issuers, digital asset service providers and secondary-market activity. For readers following stablecoins , the dispute centers on how broadly the final rule should apply without extending obligations beyond the statute.
Blockchain Association Seeks Clearer Boundaries for Stablecoin Activity
One request concerns the definition of a digital asset service provider, or DASP. The association argues that proprietary traders and liquidity mechanisms should not become regulated service providers merely because they transact onchain. It also wants Treasury to preserve exclusions for validators, self-custodial software and liquidity infrastructure. This builds on GENIUS Act implementation for stablecoin issuers . The group wants DASP status tied to providing specified services for customers, rather than broadly capturing market participants.
The letter asks to distinguish issuance from secondary-market transfers. The association supports defining issuance around the issuer’s first transfer, but says transactions by holders, market makers, bridges or custodians should not automatically create a new issuance or issuer. It also wants “knowing participation” in an unlawful issuance to require actual knowledge and substantial assistance coordinated with the issuer. Those distinctions relate to Treasury’s proposed stablecoin oversight definitions . The requested changes seek to prevent technical or secondary-market activity from triggering issuer-level obligations without the characteristics Congress specified.
Another section focuses on payment-stablecoin scope and foreign issuers. The association argues that stable-value assets lacking an issuer redemption obligation should remain outside the GENIUS Act definition. If Treasury expands “monetary value” through functional equivalence, it wants a specific list rather than an open-ended standard. For foreign payment stablecoins, it says DASPs should rely on regulators’ public regulatory lists instead of conducting open-ended issuer diligence. These recommendations seek predictable compliance boundaries rather than broader obligations created through flexible definitions.
Finally, the association wants geographic standards based on actual knowledge and information obtained in ordinary transactions, particularly where DeFi protocols cannot identify counterparties. It asks Treasury to coordinate effective dates across rulemakings and account for compliance costs. The requests continue debate around the GENIUS Act’s unfinished regulatory framework . The letter seeks changes to a proposed rule, not current law, and Treasury has not adopted these recommendations.
