Blockchain Association says Treasury’s GENIUS Act rollout needs clearer DeFi, foreign issuer rules

The Blockchain Association has submitted a 26-page letter to the U.S. Treasury Department requesting critical clarifications on proposed rules for the GENIUS Act. This landmark legislation, signed into law last year, establishes the regulatory framework for payment stablecoin issuance and is scheduled to take effect in January 2027. The industry group supports the Treasury's goal of ensuring stablecoin safety and reserve adequacy but warns that current definitions of digital asset service providers (DASPs) are overly broad. Specifically, the association argues that self-custody software and validators should be excluded from DASP classifications to avoid stifling core blockchain infrastructure. Furthermore, the letter seeks to narrow the scope of 'knowing participation' liability to prevent criminalizing ordinary secondary-market trading. The group also advocates for replacing burdensome due diligence requirements on foreign issuers with reliance on official regulatory prohibition lists. These requested adjustments are vital for the RWA market, as they define the operational boundaries for stablecoins, which serve as the primary liquidity layer for tokenized assets.