The Blockchain Association has submitted feedback to the U.S. Department of the Treasury regarding the proposed implementation of the GENIUS Act. The organization seeks to clarify rules concerning decentralized finance, secondary stablecoin trading, and foreign issuers to ensure the final regulations align with the original legislation.
A primary concern involves the definition of Digital Asset Service Providers (DASP). The association argues that companies trading solely for their own accounts should not fall under this category. They also requested that exemptions for software interfaces, blockchain validators, and liquidity providers be explicitly codified within the rules rather than relying on cross-references.
Regarding penalties for illegal stablecoin issuance, which include fines up to $1 million and imprisonment for up to five years, the group suggests that liability should only apply when participants have actual knowledge of the illegality and provide substantial assistance. They emphasize that standard secondary market activities should not be classified as participation in issuance.
The association also challenged requirements for checking foreign issuers and determining user locations. They propose that firms rely on official regulatory lists instead of conducting independent assessments. Furthermore, they noted that identifying user locations in decentralized protocols is often technically impossible and suggested relying on existing information.
The GENIUS Act was signed on July 18, 2025, with major provisions set to take effect by January 18, 2027. A general ban on offering unauthorized stablecoins is scheduled for July 18, 2028. The Treasury received 123 comments on the proposed rules by the October 19 deadline.
