Crypto lobby asks Treasury to narrow its GENIUS Act stablecoin rules before they take effect

The Blockchain Association, a crypto industry trade group, filed a 26-page comment letter with the U.S. Treasury on Monday urging it to tighten several definitions in its proposed rules implementing Section 3 of the GENIUS Act — the provision governing who can issue, offer, and sell payment stablecoins in the United States, according to The Block.

The group said it supports Treasury's core goal of ensuring stablecoins are backed by adequate reserves and issued by regulated companies. Its objections are about scope. In a thread on X, it framed the letter this way: "We applaud Treasury's implementation efforts. Our letter seeks clearer lines so the final rule matches what Congress wrote."

Three asks stand out. First, the definition of "digital asset service providers" (DASPs) — the term that decides which businesses the rules bind. The association argued Congress wrote that definition for firms serving customers and excluded "core infrastructure like self-custody software and validators," and that firms trading their own assets "shouldn't be swept in." Second, the "knowing participation" standard, which can carry criminal penalties for involvement in unlawful issuance; the group said liability should require "actual knowledge and substantial assistance in coordination with the issuer," and that ordinary secondary-market trading shouldn't count. Third, foreign issuers: the group said DASPs shouldn't have to run "open-ended due diligence" on overseas issuers they have no relationship with, and should be able to rely on regulators' public prohibition lists instead. It also asked Treasury to drop a "reasonably believes" test for locating a U.S. counterparty in favor of an actual-knowledge standard, noting that in permissionless settings a participant may "interact only with a wallet address."

Key facts

• The letter runs 26 pages and was filed Monday, Oct. 19, 2026 (The Block).
• It addresses Treasury's proposed rule on Section 3 of the GENIUS Act, covering stablecoin issuance and sale (The Block).
• The public comment period closed Monday with 123 submissions, per the federal regulations portal cited by The Block.
• The GENIUS Act was signed into law last year and is expected to take effect in January 2027 (The Block).

The real-world read

Read plainly, this is a trade group that endorses the law in principle and then asks for the three carve-outs that matter most to its members: a narrower definition of who's covered, a higher bar before criminal liability attaches, and lighter screening duties on foreign stablecoins. Those are reasonable positions for an interested party to take — and that's exactly what the Blockchain Association is here, a lobby representing firms the rule would bind, not a neutral referee. Whether any of it lands is Treasury's call; a comment letter is a request, not a result. Note too that the full contents rest on The Block's reporting and the group's own X thread — the 26-page letter itself wasn't published here, so its precise wording beyond the quoted lines isn't independently confirmed.

Opinion, and whose

The only forecast in play is timing: The Block reports the law is "expected" to take effect in January 2027. The association's characterization of what "Congress wrote" is its own legal reading, not a settled interpretation.

Sources

• The Block (reputable secondary) — reported the filing, the three main asks, the quotes, the 123-submission count, and the expected January 2027 effective date; itself cited the federal regulations portal and the Blockchain Association's X thread. No marketing or sponsored material was involved.

This is news coverage, not financial or legal advice.