The Blockchain Association has urged the U.S. Treasury to draw clearer lines around DeFi software, foreign stablecoin issuers and potential liability under proposed rules implementing the GENIUS Act. In comments on Treasury’s proposed Section 3 rules, the industry group argued that a framework designed for regulated payment issuers should not inadvertently capture unrelated software and market participants.
DeFi software and the service-provider definition
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.
Liability and foreign stablecoin issuers
The group 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 treating ordinary secondary-market activity as evidence of involvement.
On foreign-issued stablecoins, the association 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.
Advocacy positions, not final rules
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.
