The next fight over U.S. stablecoin rules is about who gets pulled into them.

The Blockchain Association filed a comment letter on October 19 asking Treasury to draw clearer boundaries around its proposed GENIUS Act regulations. The submission, reported on October 20, concerns rules implementing Section 3, which addresses payment stablecoin issuance, offers and sales. The industry group supports the broad objective of regulated issuers and adequate reserves. Its objections focus on how the proposal would apply to other businesses and activities around those issuers. These are requests to change a proposed rule, not newly granted exemptions.

In its comment letter, the association asks Treasury to distinguish customer-facing service businesses from firms trading their own assets. It also wants explicit recognition of statutory exclusions covering activities such as self-custody software and transaction validation. The group argues that participation in peer-to-peer liquidity arrangements should be assessed by function rather than tied to a particular technology. That distinction is important to its case because technical designs can change without changing the underlying activity. Treasury has not accepted those requested clarifications simply because the letter was filed.

When trading becomes participation

Another dispute concerns knowing participation in unlawful stablecoin issuance. As The Block reports, the association wants liability tied to actual knowledge and substantial assistance coordinated with an issuer. It argues that ordinary secondary-market trading should not automatically count as participation. The distinction separates helping bring an unlawfully issued token into existence from subsequently trading an existing asset. That remains the industry's requested interpretation, rather than an assurance that every secondary-market transaction is outside the law.

The association also objects to open-ended checks on foreign stablecoin issuers. Many service providers, it says, have no direct relationship with those issuers and cannot readily obtain the requested information. Its preferred approach would let firms rely more heavily on public regulatory lists. The Block also reports objections to requiring additional counterparty identification in permissionless settings where a participant may see only a wallet address. These arguments concern how obligations could work in practice; they do not establish that overseas stablecoins have received blanket approval.

The final wording will decide the reach

For readers who use self-custody wallets or decentralized trading services, the practical issue is the treatment of the infrastructure around a transaction. A rule aimed at issuers can affect more than the business that creates a token if other participants face obligations too. Conversely, an exclusion for a particular activity is not a promise that every business combining it with other services is exempt. The relevant question is what the final text requires of each role. That makes precise definitions more useful than broad claims that DeFi has either won or lost.

The submission should also be read as advocacy from a trade association representing industry members. Supporting reserve safeguards while challenging operational requirements is a policy position, not independent proof that Treasury's approach cannot work. The next meaningful development is Treasury's response through the rulemaking process and the wording it ultimately adopts. A comment letter does not change a platform's services overnight. Until there is a final decision, users should treat claims of new permissions or immediate bans with care and check what the actual rule says.