Blockchain Association files 26-page Treasury comment on GENIUS Act stablecoin rule

The Blockchain Association filed a 26-page comment letter on Monday, the final day of the comment window on Treasury's proposed rule implementing Section 3 of the GENIUS Act, the payment-stablecoin law set to take effect in January 2027. The letter sits in docket TREAS-DO-2026-0496 alongside 122 other submissions, per The Block.

The primary filing is on regulations.gov under docket TREAS-DO-2026-0496, and the association's own post sits on theblockchainassociation.org.

What the letter asks for

Three structural asks on how the rule defines and polices who is covered:

• Narrow the "digital asset service provider" (DASP) definition. The association wants Treasury to carve out self-custody software, validators, and firms trading their own assets from the DASP perimeter — functions that do not take custody of user funds or arrange counterparties for them.
• Tighten the "knowing participation" liability test. The letter urges Treasury to require actual knowledge and substantial assistance in coordination with the issuer before a service provider is deemed to have knowingly participated in a prohibited stablecoin sale. "Liability should require actual knowledge and substantial assistance in coordination with the issuer," per the filing.
• Drop open-ended due diligence on foreign payment stablecoin issuers. Rather than require every covered provider to run its own continuous diligence on every foreign issuer, the association wants reliance on public prohibition lists maintained by regulators.

A fourth ask touches location checks: replace the proposed "reasonably believes" standard for determining whether a counterparty is in the United States with one based on actual knowledge in the ordinary course of business.

The GENIUS Act context

The GENIUS Act, enacted earlier this year, is the first US-federal framework governing who may issue and sell payment stablecoins. Section 3 — the subject of Monday's docket — covers the licensing, prohibitions, and gatekeeping obligations imposed on service providers who distribute those tokens. Treasury's proposed rule is the operational text that will determine, in practice, which firms must register, what they must know about their counterparties, and when they are on the hook for someone else's violation.

The Blockchain Association's X thread summarizing the filing frames the stakes in operational terms: a definition that pulls in validators or self-custody wallet software could sweep large parts of the Ethereum and Bitcoin stacks into a compliance regime designed for custodians and distribution venues.

What to watch

1. The docket close-out. With 123 submissions in docket TREAS-DO-2026-0496, Treasury's response window — and whether the final rule narrows the DASP perimeter the industry contested — is the next decision point.
2. A parallel SEC posture. The SEC's own stablecoin-adjacent workstreams, including the machine-understandable data roundtable set for November 9, will land on top of whatever Treasury ships.
3. The January 2027 effective date. The statute's deadline leaves Treasury a tight window to finalize, meaning the proposed rule's rough edges — the ones the association's letter identifies — are likely to persist unless addressed in the final text.

Context

The association's filing is part of a broader industry pattern of pushing back on definitions that absorb non-custodial actors into frameworks written for custodial ones. The debate over validator liability has already surfaced in the Treasury's Tornado Cash sanction litigation and in the European Union's MiCA transition work; the GENIUS Act docket is now the US-federal front where that line gets drawn for payment stablecoins specifically.

The ask on foreign-issuer diligence is also a familiar one — the association had previously argued, under the earlier FinCEN framework, that custodians cannot be expected to run their own continuous diligence on every foreign counterparty without a public baseline. Monday's letter restates that argument in a payment-stablecoin context.