# US stablecoin proposal faces wallet and market-maker challenge Author: Hatice Ertaş Language: English Published: 2026-10-20T20:01:46+03:00 Updated: 2026-10-20T20:01:46+03:00 ![Conceptual stablecoin rules shown by a wallet device and dollar tokens separated by glass](https://kriptometa.com/uploads/abd-stablecoin-taslagina-cuzdan-ve-piyasa-yapici-itirazi-1ee6eb139ff3_article.webp) ## Key takeaways - Blockchain Association submitted its response to Treasury’s GENIUS Act issuance, offer and sale proposal on October 19. - The group wants statutory exclusions for noncustodial wallet interfaces and validators written explicitly into the regulations. - It proposes reliance on official foreign-issuer status lists and a location test that does not infer a user’s country from a wallet address. Blockchain Association has asked the US Treasury to distinguish businesses serving customers from firms trading their own assets. Its comment letter also seeks narrower tests for knowingly assisting unlawful issuance and checking foreign stablecoin issuers. Blockchain Association has asked the US Treasury to draw clearer boundaries for wallet software and market makers in its proposed rules on payment [stablecoin issuance](https://kriptometa.com/en/glossary/stablecoin), offers and sales. In its [October 19 comment letter](https://theblockchainassociation.org/posts/blockchain-association-comment-letter-on-us-treasurys-proposed-rule-implementing-section-3-of-the-genius-act), the crypto industry group supports the GENIUS Act’s framework for regulated issuers but warns against interpretations that could impose obligations on firms that do not provide services to customers. The submission responds to an August 18 proposal implementing Section 3 of the law. A central concern is the definition of a digital asset service provider, or DASP. The association wants Treasury to distinguish businesses providing commercial services to customers from firms simply buying and selling their own assets. It also asks for the law’s existing exclusions for [noncustodial wallet](https://kriptometa.com/en/glossary/custodial-non-custodial-wallet) interfaces, validators and peer-to-peer [liquidity pools](https://kriptometa.com/en/glossary/liquidity-pool) to be written directly into the regulations, rather than incorporated only by reference. > “Firms trading their own assets shouldn’t be swept in.” > > Blockchain Association’s official X summary of its submission Blockchain Association’s post explaining its October 19 submission and principal requests: [Blockchain Association — GENIUS Act comments](https://x.com/BlockchainAssn/status/2112311292950143048) ## Independent trading versus distribution for an issuer The [26-page letter](https://theblockchainassociation.org/api/media/file/Blockchain%20Associate%20Comment%20Letter%20re%20GENIUS%20Act%20Regulations%20on%20Payment%20Stablecoin%20Issuance%20Offer%20and%20Sale.pdf) argues that issuer status should depend on both an [obligation to redeem](https://kriptometa.com/en/stablecoin-risks-checklist) a token for a fixed monetary value and a promise that creates an expectation of stable value. Blockchain Association wants to avoid automatically treating a technical minting or burning system, a bridge creating wrapped tokens on another network, or a company supplying a product’s branding as an issuer. For “knowingly participating” in unlawful issuance, the group proposes actual knowledge of the facts constituting the violation and substantial affirmative assistance coordinated with the issuer. The letter gives three market-making examples: Blockchain Association’s proposed distinctions, not newly adopted rules | Transaction example | The letter’s proposed treatment | |---|---| | An independent market maker quoting bids and offers without an issuer arrangement | Ordinary secondary-market trading should not, by itself, count as participation in issuance. | | A firm minting or redeeming tokens for its own inventory | Without an issuer-directed placement role, the transaction should not automatically be treated as distribution. | | A firm paid by an issuer to distribute an initial allocation under its instructions | It could constitute participation if the issuance is unlawful and the required knowledge conditions are also met. | The letter notes that fungible tokens can become commingled after transfers, making a broad approach based on identifying “newly issued” units difficult to apply. It also points to July 18, 2028 for the general restriction on DASPs offering or selling noncompliant stablecoins. The association opposes using the participation-in-issuance provision to impose the same restriction on secondary-market activity earlier. ## Clear tests for foreign issuers and user location A platform without a direct contractual relationship with a foreign stablecoin issuer may struggle to investigate the issuer’s entire compliance arrangements. Blockchain Association wants firms to be able to rely on the Office of the Comptroller of the Currency’s registered foreign-issuer list and Treasury notices of prohibitions or status changes. Its proposed protection would not cover firms with actual knowledge of material facts contradicting the official information. The group also requests a consolidated, machine-readable list carrying registration and prohibition dates. On permissionless networks, a [wallet address](https://kriptometa.com/en/glossary/wallet-address) alone does not establish its owner’s country. The letter proposes a test based on information a business actually obtains in its ordinary operations, replacing a “reasonable belief” standard for whether a person is in the United States. It does not seek a general exemption for known US customers or activities deliberately targeting the US market. The objection concerns expectations to build additional identity or geolocation programmes solely because a firm transacts with a blockchain address. The association also proposes examining practical control in technical services. A narrowly bounded emergency pause function on a bridge, for example, should not alone amount to custody if it gives no ability to [sign transactions](https://kriptometa.com/en/glossary/digital-signature) or transfer user assets. For tokens described as algorithmic or synthetic, the letter favours examining their payment function, redemption obligations and stable-value promises instead of relying on labels. It also prefers a defined list of monetary forms to an open-ended interpretation of “functional equivalents.” ## Transition timing and the state regulatory route The group argues that a broad DASP interpretation could bring compliance obligations to more businesses than Treasury estimates and understate costs for platforms without issuer relationships. It wants the implementation date for the issuance, offer and sale provisions coordinated with related licensing, state-regime and foreign-issuer registration rules. The letter notes that the relevant proposed section does not specify a separate effective or compliance date. Other GENIUS Act implementation files are also at the proposal stage. On September 24, the Fed released [full-reserve, capital and bank-application proposals](https://kriptometa.com/en/fed-stablecoin-full-backing-barr-redemption) for institutions under its supervision. State regulatory organisations have raised a separate concern. The Conference of State Bank Supervisors, alongside MTRA, NASCUS and NCSL, [asked in an October 19 joint submission](https://www.csbs.org/node/587566) for issuers operating under qualifying state regimes to be allowed to continue during the transition. They argue that limiting transitional protection to firms awaiting federal approval would weaken the law’s state route. For earlier context on implementation, the [13:21–15:47 section of Jonathan Gould’s December 8, 2025 address](https://www.youtube.com/watch?v=WpekEqQwxuQ&t=801s) covers the OCC’s role concerning foreign and federally qualified payment stablecoin issuers and its need for public input during rulemaking. Blockchain Association published the summit recording on its official channel on December 17, 2025. **A comment letter does not change the rules.** The detailed tests for wallet software, market makers and foreign issuers are Blockchain Association’s proposals. July 18, 2028 refers to the general DASP offer-and-sale restriction cited in the letter; other provisions have separate implementation schedules.