Blockchain Association Urges Treasury to Clarify DeFi, Foreign Issuer Rules in GENIUS Act Rollout

The Blockchain Association has told the U.S. Treasury Department that its implementation of the GENIUS Act needs clearer rules for decentralized finance platforms and foreign stablecoin issuers, according to a report by The Block.

The trade group, which represents major crypto firms in Washington, submitted its response to Treasury's request for public input on how the stablecoin law should be put into practice. Its core argument: the statute as drafted leaves two significant constituencies — DeFi protocols and issuers based outside the United States — without a workable compliance path.

The GENIUS Act, signed into law in July 2025, established the first federal framework for payment stablecoins. It requires issuers to be licensed, hold reserves in high-quality liquid assets and submit to regular reporting. Treasury, alongside the Federal Reserve and other regulators, is now writing the rules that will determine how those obligations apply in practice.

Where does the Blockchain Association see gaps?

The association's filing focuses on two pressure points.

First, DeFi. The law was written with traditional issuers in mind — entities that mint tokens, custody reserves and can be examined by regulators. Decentralized protocols, where no single operator controls issuance, don't map cleanly onto that structure. Without explicit guidance, the group argues, developers and decentralized platforms face legal uncertainty about whether they fall within the statute's perimeter at all.

Second, foreign issuers. The GENIUS Act contulates a pathway for offshore stablecoin providers to serve U.S. users, but the association says Treasury has not defined the terms tightly enough. Ambiguity over registration, reciprocity with foreign regimes and enforcement against non-compliant offshore issuers could leave U.S. market participants exposed — or push liquidity to jurisdictions with lighter rules, the group contends.

What happens next?

Treasury's public comment period is part of a broader interagency process to issue implementing rules under the statute. The association's submission joins responses from banks, payments companies and other crypto lobby groups, all competing to shape how the framework gets operationalized.

The stakes are operational as much as legal. Payment stablecoins have become core settlement infrastructure across crypto markets, and issuers — from bank-backed ventures to offshore operators — are waiting on the final rules before committing to U.S. compliance structures. How Treasury treats decentralized issuers in particular will determine whether DeFi platforms can integrate regulated stablecoins or remain structurally outside the system.

Treasury has not committed to a fixed date for issuing the implementing guidance. The association's intervention signals that industry expects the detail — not the statute itself — to decide who can legally issue and distribute dollar-backed tokens in the U.S. market.

By Daniel Okafor